It got the shares, equivalent to a 3.49 percent stake in Absa Kenya, from 2,045 shareholders out of the 66,771 minority investors in the Kenyan bank.

Absa Group, which held around 68.5 percent of Absa Bank Kenya, offered Sh34.50 per share to buy stocks from minority investors in a transaction that was expected to lift its stake by up to 16.5 percent.

But 64,726 minority shareholders skipped the tender offer, leaving Sh24.4 billion of Sh30.8 billion of war chest that Absa has set aside for snapping the shares on the table.

Analysts linked the under-subscription to the surge in Absa’s share price at the Nairobi bourse, which narrowed the premium that the South African multinational had offered in the tender.

Absa stock opened trading at Sh29.20 at the Nairobi Securities Exchange (NSE) on June 19, the day its parent firm announced the tender offer, which closed on August 11.

The share stood at Sh33.65 on August 11 and closed trading at Sh34.40 on Wednesday.

“The offer appears to have underperformed mainly because shareholders viewed the offer price of Sh34.5 as insufficient relative to Absa’s earnings potential, dividend track record and the stock’s recent price appreciation,” argued James Kinya, research and global markets analyst at Rock Investment Bank.

“Looking at the current share price, the premium appeared less compelling and thus minority investors had little incentive to give up future upside. Moreover, the offer also gave larger shareholders less certainty that all shares they tendered would be accepted, which may have further reduced their willingness to participate,” added Mr Kinya.

The bank on Tuesday more than doubled its interim dividend to Sh0.50 per share despite reporting a 9.8 percent decline in net profit for the half year ended June 2026.

The lender reported a net profit of Sh10.5 billion in the half year to June, down from Sh11.6 billion posted in a similar period last year.

Its management attributed the profit drop to a lower interest rate regime, one-off costs and a slump in forex earnings.

Absa Group will earn Sh1.95 billion from the interim dividend for the 71.99 percent stake.

South African banks have been stepping up acquisitions in East Africa, filling a vacuum left by retreating European banks ⁠and riding a wave of increased continental trade and investments into energy and infrastructure.

South Africa’s slow growth and mature sector are pushing its biggest banks to expand elsewhere.

Nedbank agreed earlier this year to acquire a majority stake in Kenya’s NCBA, beating South African rival Standard Bank, which operates in Kenya as Stanbic, to the prize.

Kenya’s appeal lies in its gateway role to the East African Community, a fast growing bloc expanding by at least 5.0 percent a year.
Absa is likely to return to shareholders with an improved offer, having identified the acquisition as a key to widening its presence in the retail market.

In its offer document, the group also left open the option of acquiring additional shares through open market trades or a new, improved tender should the offer fail to hit its target.

“Absa Group reserves the right, subject to obtaining any necessary approvals from the Capital Markets Authority (CMA) or any other relevant regulatory authorities…to launch one or more additional tender offers in relation to Absa Kenya, or otherwise to acquire additional shares through on-market transactions in Absa Kenya, following the close of the tender offer,” Absa Group said in its tender offer document.

Should the bank exercise its right to approach Absa Kenya shareholders again for more shares, it would mirror the actions of rival South African lender Standard Bank when it acquired an additional 15 percent stake in Stanbic Kenya from 2018 at a cost of more than Sh5 billion.

Standard Bank launched its tender offer in May 2018, seeking an additional 59 million shares at a price of Sh95 apiece that would have raised its holding in Stanbic from 60 percent to 75 percent.

The offer failed to hit its target after getting an extra 8.01 percent at the closing period, raising ownership to 68 percent.

The bank later sought and obtained approval from the CMA to bridge the gap to 75 percent through open market share purchases.

It bought the additional shares over the next four years, ultimately hitting the 75 percent target in May 2022.

“Kenya is a strategically important market for Absa Group and remains central to our East Africa growth ambitions,” Charles Russon, Absa’s group executive for Africa ⁠regions, said earlier.

He added the proposal reflected confidence in the bank’s leadership, strategy and long-term growth prospects, as well as Absa’s commitment to supporting Kenya’s economy.

Absa Group, South Africa’s third-biggest lender by assets, said it intends to maintain Absa Kenya’s listing on ⁠the NSE after the transaction.
The group added it does not plan to alter the bank’s business strategy, management team, staffing levels or day-to-day operations.

Absa’s Africa Regions ⁠business contributed 31 percent to group headline earnings in 2025.

That same year, Kenya contributed about 19 percent of the profits in the Africa regions portfolio.