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Shares in BOC Kenya have more than doubled since a takeover bid by Carbacid Investments was abandoned, delivering a substantial gain to businessman Ngugi Kiuna, who opposed the offer on the grounds that it undervalued the company.
The industrial and medical gases maker closed at an average of $1.35 (174.5 shillings) on Sunday and touched $1.35 (175 shillings) during the session. That compares with $0.62 (80.5 shillings) on the day the transaction was terminated in March last year, and with the $0.49 (63.5 shillings) a share that Carbacid and its controlling shareholder, Aksaya Investments, had offered in November 2020.
Kiuna, a former chairman of BOC, held 7.60% of the company when the bid was announced. He raised his holding while contesting the transaction and now controls 17.91%, according to company disclosures. The stake is worth about $4.7 million (609 million shillings), based on a market capitalisation of roughly $26.3 million (3.4 billion shillings). The Carbacid offer had valued the entire company at $9.5 million (1.23 billion shillings).
The holding also gives him the ability to block a delisting, which requires the support of a supermajority of shareholders.
Kiuna challenged the offer at the Capital Markets Tribunal, arguing the price was too low. The tribunal ruled against him on Aug. 29, 2024. The parties terminated the transaction on March 28 last year, citing the bidders' failure to meet a contractual target of closing by July 31, 2021.
An independent adviser had questioned the price at the time. Dyer and Blair Investment Bank, appointed by BOC's board, valued the company at $0.71 (91.76 shillings) a share in early 2021. The board made no recommendation for or against the offer, leaving shareholders to assess it. BOC Holdings, the majority shareholder, supported the transaction.
BOC's earnings have strengthened since the deal lapsed. Net profit rose 48.8% to about $2.4 million (314 million shillings) in the year ended December, from $1.6 million (211.6 million shillings) a year earlier, as sales increased by 223 million shillings to $11 million (1.42 billion shillings). The company reduced distribution and selling costs.
Shareholders received a dividend of $0.10 (12.85 shillings) a share for 2025, totalling about $1.9 million (250.9 million shillings). That compares with 4.15 shillings a share, or 81 million shillings, for 2020, the year the offer was made. Kiuna's holding earned roughly $347,000 (44.9 million shillings) from the latest payout.
Carbacid had argued that combining the two companies would create the largest industrial gases business in the region, improve purchasing terms with suppliers and widen the customer base. It remains the larger of the two firms and has expanded across East Africa, though it has said new competitors have entered its markets and that it is responding by improving service and delivery. Carbacid nearly tripled its dividend to 2 shillings a share in the year through July 2025.
The two companies have a long history of failed transactions. BOC attempted to acquire Carbacid in 2009 but terminated the offer in October of that year after the Capital Markets Authority ruled against the deal. Trading in both stocks had been suspended since 2005 while the matter moved through the regulator and the courts.
BOC has said it will pursue growth independently, concentrating on industrial and medical gases, including oxygen, and welding products. The company has outlined a strategy centred on expanding its presence in East Africa through local partnerships and tighter cost control.
Kiuna is a long-standing figure in Kenyan business. He was among the founding members of investment firm TransCentury and spent decades in consumer goods before moving into distribution. He founded Maxam in 2006 to distribute Heineken beer in Kenya, and sued the Dutch brewer after it terminated the arrangement in 2016, winning an award of roughly $13 million that was upheld by the Court of Appeal and the Supreme Court.
Litigation arising from that case is continuing. The High Court declined on July 2 to stop a law firm from pursuing more than $1.5 million (189.2 million shillings) in fees it says it earned representing Maxam in the dispute. Kiuna denies that a formal advocate-client relationship existed.
BOC did not respond to a request for comment on the share price move.
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