CFC Bank: A changing of guard

Following the death of CFC's long serving chairman about a year ago it would seem a re-think by the controlling shareholders was undertaken leading to takeover discussions with Standard Bank of South Africa. The deal as announced will have two components, the first being a takeover of CFC Bank by Standard Bank, and the second will involve of a merger of Stanbic Kenya, Standard Bank's business in Kenya, and CFC Bank. The resulting merger should result in the creation of Kenya's fifth largest bank. In our view we believe a third component is likely, involving the sale of the insurance businesses at a later stage. Our valuation estimate for CFC Bank is Ksh.34.80 and Ksh.38.65. We believe the share was already overvalued before the announcement and the subsequent share price appreciation was unwarranted, importantly so as Standard Bank had provided pricing guidance. We rate the share as a SELL.Download CFC_Bank_07022007.pdf

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Nice site. Like the analysis