GraceKennedy Financial Group Limited (GKFG) has spent at least $387 million in its takeover bid of Key Insurance Company Limited with its interest in the listed company to reach 98.9 per cent.

This update was provided by Key on Monday which revealed that the GKFG takeover bid received significant acceptance by minority shareholders. GKFG previously owned 73.27 per cent of Key Insurance and had launched a takeover bid to acquire the remaining 26.73 per cent interest for $2.70 per share or a total consideration of $403.7 million.

Based on the disclosure dated July 22, GKFG acquired an extra 25.63 per cent of Key or an estimated 143.37 million ordinary shares. This takes GKFG’s interest well above the 80 per cent threshold which gives it room to delist Key Insurance from the Jamaica Stock Exchange (JSE).

“GKFG has also advised that the Company’s Registrar is actively working with the JSE and the Lead Broker to facilitate the transfer of these shares to GKFG and ensure the prompt settlement of amounts due to the accepting shareholders. All actions are being conducted in accordance with the provisions of the offer’s terms and the Rules of the JSE,” the Key disclosure stated.

GKFG indicated in the takeover bid circular that it would seek to invoke Section 209 of the Companies Act to “squeeze out” or make a compulsory acquisition of the remaining Key shares by shareholders that did not accept the offer. With GKFG owning more than 90 per cent of Key’s shares, this might happen in short order with the remaining investors to be paid at $2.70 and Key to become a wholly owned subsidiary of GKFG. GKFG is the financial holding company subsidiary of GraceKennedy Limited.

Key Insurance listed in March 2016 on the JSE Junior Market at $2.27 per share. The general insurer eventually ran into some difficulties with its regulatory requirements which pushed Key’s board to consider an equity raise via a rights issue to regain compliance. However, GKFG acquired a 65.23 per cent interest in Key from its three main shareholders in April 2020 for $483 million or $2.01 per share. Key then completed a renounceable rights issue in January 2021 where it raised a gross amount of $668 million at $3.50 per share. GKFG and GK Capital Management invested a combined $599.2 million into Key which brought its stake up to 73.58 per cent.

With the takeover bid now closed, GKFG has spent a combined $1.46 billion on its investment in Key. GKFG also owns GK General Insurance Company Limited which is a larger general insurer.

Key Insurance’s first quarter report saw its insurance revenue rising by 15 per cent to $801.73 million, but the insurance service result was minus $11.22 million. An increase in other operating income with flat expenses resulted in net profit rising 26 per cent to $12.48 million. Key is currently aiming to grow its comprehensive book of motor business as it diversifies away from its traditional third-party policy strategy.

Key’s asset base grew five per cent during the quarter to $4.83 billion with $2.54 billion in investment securities and $548 million in cash. Total liabilities and shareholder’s equity was $3.39 billion and $1.44 billion, respectively. Key was chaired by the recently deceased Donald ‘Don’ Wehby between April 2020 to February 2025 before Rochelle Cameron was appointed as the new board head.

Key’s stock traded at $2.50 on Monday which leaves it up 10.66 per cent in 2025 with a market capitalisation of $1.51 billion. GraceKennedy Limited’s board will meet tomorrow, July 31 to consider the declaration of an interim dividend to be paid in September.