Centum Investment Company has cancelled its intentions to sell its majority ownership in Sidian Bank to Nigeria’s Access Bank PLC due to a delay in the execution of the share purchase agreement (SPA).
According to Centum Group CEO James Mworia, the termination of the share purchase agreement means Centum will remain the majority shareholder of the mid-tier bank.
“The lapse of this agreement means that Centum continues to work with the management of the Bank on maximizing value to customers and all our stakeholders,” said Mworia.
Centum Investment Company PLC announced on June 7, 2022, that it had entered into a share purchase agreement with Access Bank PLC to sell all of its shareholding in Sidian Bank Limited.
The Nairobi Securities Exchange-listed investment firm owns 83.4 percent of Sidian’s issued shares both directly and through its wholly-owned subsidiary, Bakki Holdco Limited.
The completion of Access Bank PLC’s acquisition of shares in Sidian was subject to certain conditions, including the Long Stop Date, as stipulated in the SPA.
Centum highlighted that, despite the Central Bank of Kenya’s help and direction, the Long Stop Date was reached before the SPA’s criteria were met, implying that the SPA was terminated and ceased to have force and effect.
Furthermore, Centum was unable to achieve acceptable terms with Access Bank PLC for an extension of the SPA and hence chose not to seek such an extension.
“Sidian is a profitable bank with a well-cut-out niche market that makes it one of the choice assets in Centum’s portfolio,” said Mworia.
The announcement comes as Centum has called a shareholders’ meeting to approve its planned share buyback.
The share repurchase is designed to give liquidity to dual-listed firm owners while also rewarding long-term shareholders whose proportional ownership would grow as a result of the share repurchase.
Access Bank, which has more than USD25.5 billion in assets, focuses on corporate retail banking. The lender hoped to accelerate the growth of Sidian, which would have been merged with Access Bank Kenya, formerly Transnational Bank.