Puma Energy plans to finalise due diligence on its acquisition target KenolKobil by the end of next month, bringing closer the conclusion of the deal announced in May.

KenolKobil, Kenya’s largest oil marketer on Wednesday said it was cautiously optimistic that the acquisition by the Geneva Company will go through.

“Puma energy is expected to complete due diligence on the company in July, after which negotiations with the company will continue. If the outcome of the due diligence is satisfactory, then Puma energy may proceed with a transaction subject to applicable regulatory approvals,” KenolKobil said in a statement.

Switzerland based Puma energy, is planning on acquiring 100 per cent shareholding in KenolKobil, which will result in the shares of the Kenyan based oil marketer being unavailable for trading at the Nairobi Securities Exchange.

Kenol’s share price has risen 25 per cent since it resumed trading at the NSE a week ago, as speculative investors betting that Puma will acquire the company’s shares at a premium buy into the counter.

Transaction advisors for the deal, Kestrel Capital, had in May told our sister publication the Business Daily that KenolKobil’s shares were likely to fetch between Sh20.13 ($24 cents) and Sh21 ($25 cents) each in the takeover deal, which would imply a 33 per cent premium over the shares current market price of Ksh15.70 ($19 cents).

The valuation would place the total value of the takeover deal at an estimated Ksh33 billion ($392 million), which would be the biggest acquisition deal in Kenya dwarfing the Ksh26 billion ($309million) that France telecom paid for a 51 per cent stake in Telkom Kenya-now renamed Orange.

KenolKobil issued a profit warning last week, citing increased volatility in local currencies in the countries in which it operates saying this had put a strain on its expected profits for the first half of the year.

“The company currently projects earnings for the year ending December 31, 2012 may be materially lower than reported for the same period in 2011,” the company said in a statement then.

“Should international oil prices, currency trends and financing costs among other factors improve, it would reverse some of these negative effects and reflect more positive results for the full year 2012," it added.

In Kenya, a profit warning is issued if a company expects profits to fall by more than 25 per cent in any financial year. Going by the profit warning, the firm expects full year earnings to be below Ksh2.4 billion ($28.2 million).

Its net profit stood at Ksh3.2 billion ($37.2 million) in the year ending December 2011 compared with Ksh1.9 billion ($22.3 million) in the previous year, as sales more than doubled in 2011 to Ksh222.4 billion ($2.6 billion).