NEGOTIATIONS that would have seen KenolKobil acquired by Puma Energy have collapsed.The Nairobi Securities Exchange listed oil marketing giant announced yesterday that the negotiations have been terminated but gave no reason for this.
"The Directors of KenolKobil Limited ("the company") whose shares are traded on the Nairobi Securities Exchange ("NSE") wish to advice the general public, shareholders and other stakeholders that they have been informed by the key shareholders' financial adviser, Kestrel Capital Ltd, that the negotiations with Puma Energy regarding a potential acquisition of control shareholding in the company, have been terminated," a brief statement from KenolKobil said.
A company source said Kestrel Capital is bound by a confidentiality agreement with both the key shareholders and Puma Energy regarding their private negotiations and as such could not provide more details on the development.
Puma has been conducting its due diligence on KenolKobil but had not indicated if it has finished this or not. The deal, that was supported by Kobil's management but opposed by a section of employees, would have seen Puma becoming the majority shareholder of the oil marketer.
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.
It was expected that the 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.
The rumour that the negotiations were headed for collapse first emerged in December leading to fall in the share price.The deal was first announced in May sparking fears among employees that they would be laid off. The company however assured them their jobs were safe.
Kenol Kobil reported a Sh3.9 billion loss for the last financial year and had tried to assure investors the deal would go through. The last notification KenolKobil issued was on the September 11, when the company said Puma Energy will complete its due diligence in October. There has been no subsequent further notification.