KenolKobil CEO Ohana Is Said to Resign Amid Rubis Takeover

(Bloomberg) -- KenolKobil Ltd.’s Chief Executive Officer David Ohana has resigned in the midst of a takeover of the fuel retailer by Rubis SCA, a person with knowledge of the matter said.

In addition to the takeover the company had been the subject of an insider trading probe. Ohana, who’s been head of the Nairobi-listed company since 2013, was last month excused from legal proceedings over the alleged illegal activity before the Rubis deal was announced in October. Others implicated in the probe, including the executive director and chairman of a stockbroker, are facing regulatory enforcement proceedings.

While Ohana’s contract was to expire at the end of 2019, he’s now expected to hand over to a new CEO in a few weeks, the person said. KenolKobil’s Communications Manager Loise Gitonga declined to comment.

Paris-based Rubis agreed to purchase KenolKobil in a deal that valued the retailer with operations in six African markets at $353 million. It received regulatory approval last month to compulsorily acquire the remaining shares in the company that it doesn’t already own.

Ohana, who held a 5.2 percent stake in the company, had given Rubis an irrevocable undertaking to sell his shares.

Sustain Growth

The deal was necessary for KenolKobil to sustain its growth trajectory, according to Silha Rasugu, an analyst for frontier markets at EFG-Hermes in Nairobi. The company’s rivals in Kenya include Vivo Energy Plc and Total SA.

While it has done well in specific segments such as oil tank supplies, imports, trading and aviation, it requires investment into the low-margin retail segment by an international oil major to balance the portfolio, he said. Due to the intense competition in the downstream business, volume growth through an extensive retail network is key to higher returns, he said.

“For the international oil majors, this may trigger consolidation in target markets to protect market share,” Rasugu said.

--With assistance from David Herbling.

To contact the reporter on this story: Bella Genga in Nairobi at bgenga2@bloomberg.net

To contact the editors responsible for this story: David Malingha at dmalingha@bloomberg.net, Helen Nyambura, Antony Sguazzin

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