Kenya's Kenyatta family now owns $109 million stake in South Africa's Nedbank

Kenya's Kenyatta family, the family of the country's founding president, now owns about 6.12 million shares in Nedbank Group Ltd., a stake of about 1.2% in the South African lender worth about R1.81 billion ($109 million), after swapping most of its holding in Nairobi-based NCBA Group Plc for Nedbank stock.

Nedbank issued 43,631,052 new shares to NCBA's selling shareholders as it took control of the Kenyan bank this week, lifting its shares in issue to 520,903,680. The sellers now own about 8.4% of Nedbank. At Friday's close of R295.29 on the Johannesburg Stock Exchange, the new block is worth about R12.9 billion ($776 million). The sellers also received about 23.2 billion shillings ($179 million) in cash.

The Kenyatta stake

NCBA sellers received 4.02994 Nedbank shares and 21 shillings in cash for every 100 NCBA shares Nedbank bought from them. Each holder was entitled to sell 66% of its shares.

The family holds most of its NCBA shares through Enke Investments Ltd., which owned 217.5 million shares. Its 66% entitlement brings it about 5.78 million Nedbank shares, worth about R1.71 billion ($103 million). Muhoho Kenyatta, the younger brother of former President Uhuru Kenyatta and an NCBA director, owned another 12.75 million NCBA shares in his own name, which converts into about 339,000 Nedbank shares worth about R100 million ($6 million). Together, the family also collected about 3.19 billion shillings ($24.6 million) in cash.

The figures could be higher. Shareholders were able to offer more than their 66% entitlement, and Nedbank took about 42% of the extra shares tendered. If the family sold its full holding through that pool, its Nedbank stake would rise to about 7.45 million shares, worth about $133 million. Individual allocations have not been published.

Other families

The Ndegwa family, heirs of former Central Bank of Kenya Governor Philip Ndegwa and NCBA's largest shareholders through First Chartered Securities Ltd., get about 6.55 million Nedbank shares, or 1.26%, worth about $116 million. The Merali family's Yana Investments Ltd., built by the late Sameer Group founder Naushad Merali, gets about 2.37 million shares, or 0.45%, worth about $42 million.

The three families together own about 15 million Nedbank shares, or 2.9% of the bank, worth about $268 million at Friday's close.

Nedbank's shares have gained about 18% since the deal was priced in January at a reference of R250 a share, which has lifted the value of the stock the NCBA sellers received. The shares fell 1.9% on Friday after closing at R300.93 on Thursday.

The new shares dilute Nedbank's biggest existing investors. As of Jan. 30, South Africa's state-owned Public Investment Corp. held 14.8%, Allan Gray 9.5% and BlackRock Inc. 5.4%.

Still in NCBA

The Kenyattas also keep about 78.3 million NCBA shares, the 34% of their holding that Nedbank did not buy at the base level. NCBA stays listed on the Nairobi Securities Exchange, with Nedbank owning 66%.

NCBA was formed in 2019 through the merger of NIC Group and Commercial Bank of Africa, the lender long linked to the Kenyatta and Ndegwa families. The Kenyatta family also has interests in dairy, hotels and media. Uhuru Kenyatta was Kenya's president from 2013 to 2022, and his father, Jomo Kenyatta, led the country from independence in 1963 until his death in 1978.

"The name is the same, the people are the same, but the ambition and capabilities are tremendously magnified," NCBA Group Chief Executive Officer John Gachora said of the deal.

Figures were converted at R16.6 and 129.9 shillings to the dollar.