Puma in talks to buy KenolKobil, shares frozen

KenolKobil shares have been suspended from trading on the Nairobi Stock Exchange indefinitely amid news the listed firm is to be bought by international oil trading and marketing firm Puma Energy. Puma has entered into negotiations with key shareholders of the firm to buy an undisclosed stake, said to be over 25 per cent, which could see a complete takeover of the region's largest oil marketer.

No figure has been given for the transaction as Puma is yet to carry out due diligence. KenolKobil has a market capitalization of Sh18.3billion going by its share's last trading price of Sh12.50 before the suspension. The suspension of the share by the Capital Markets Authority is to prevent speculation in the shares during the period before the transaction is completed. The process could see the eventual de-listing of KenolKobil from the NSE as an option.

Management of KenolKobil has said it supports the deal as it will bring in a strategic investor who will strengthen the company's oil supply and trading activities. Jacob Segman, chairman of KenolKobil said the key shareholders signed the agreement to sell their majority stake in the company to Puma on Monday.

“Key shareholders have been negotiating for some time with Puma Energy to sell their majority stake in KenolkKobil,” Segman said. “This exclusive agreement with Puma is subject to regulatory approval and of course price confirmation. We are now about to start the whole process of due diligence.” Segman said the process will take some time before price confirmation is made.

Puma Energy is 65 per cent owned by global oil trading multinational Trafigura with Angola's state-owned oil firm Sonangol taking another 20 per cent. Puma is present in West, Central and Southern Africa as well as in South America for a total of 29 countries around the world.Acquisition of KenolKobil would give Puma nearly a complete PanAfrican footprint. Puma's has annual sales of US$8.1billion nearly four times the US$2.5bn KenolKobil did last year.

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