https://www.businessdailyafrica.com/news/A-third-of-NSE-firms-risk-hostile-buyout/539546-5328746-63smi8z/index.htmlAt least 20 or a third of the companies listed on the Nairobi Securities Exchange (NSE) risk forceful takeover by their majority shareholders - which in turn could lead to their delisting from the bourse - following changes to the law that now make it easier for top owners to compulsorily acquire minority investors.
The Statute Law (Miscellaneous Amendments) Act No. 12 of 2019 now allows shareholders with a 50 percent stake to make compulsory acquisitions of shares held by the remaining investors. The takeover threshold previously stood at 90 percent, a level that made it difficult for top shareholders of Unga Group and logistics firm Express Kenya to forcibly buy out minority investors. As a result, they were unable to delist the firms.
The drastic law change caught many stakeholders by surprise with NSE fretful that this could egg on multinational firms to delist at a time when the Nairobi bourse has been plagued by lack of fresh listings.
“We were not involved in the amendments,” an NSE director who requested anonymity told the Business Daily. “The 90 percent threshold was meant to ensure that nearly all shareholders are in agreement in takeover deals.”
The law change was sponsored by Aden Duale, the Majority Leader at the National Assembly, suggesting that it had the backing of the government.SOMETHING VERY VERY WRONG WITH THIS GOVERNMENT
There are only two emotions in the stock market, fear and hope. The problem is, you hope when you should fear and fear when you should hope