Rescued Banks: Bidders Clash over Acquisition


By Emele Onu 


Local and foreign investors that bidded for the rescued banks are presently embroiled in clashes of interest over first right of consideration for the acquisition for the rescued financial institutions. THISDAY findings indicate that the development arose as a number of the investors that beat the July 31 deadline given by the Central Bank of Nigeria (CBN) for the submission of bids became desperate to make the acquisition.


“Besides what the investors submitted in their confidential bids, some of them have gone to lobby the Boards and key shareholders of the banks as well as officials of the CBN believed to be involved in driving the sale process,” a director in one of the banks told THISDAY, at the weekend. Key officials of the sale process were said to have met with the bidders last week for further clarifications, as a prelude to the announcement of preferred and reserve bidders of the banks by the CBN between this month and September.  


Foreign banks including Standard Bank Group, First Rand, Old Mutual Plc – all South Africa financial institutions, as well as a number of private-equity firms and local banks such as First Bank PLC, Fidelity Bank, Ecobank and Skye Bank had carried out due diligence on the banks and filed their expressions of interest (EOI).


CBN sources said there were EOIs by the prospective investors on all the eight rescued banks namely Oceanic Bank, Intercontinental Bank, Union Bank, Afribank, Finbank, Equatorial Trust Bank, Spring Bank and BankPHB. With the expression of interest closed in July, it was gathered that the contest has been polarised between prospective local investors and foreign buyers over who deserves primary consideration.


The local bidders are arguing that since the CBN and banks operating in the country are funding the Asset Management Corporation of Nigeria (AMCON), which is created to resolve the non- performing loans of the banks, it makes sense to sell the banks to local bidders among them (as against the foreign bidders); thereby cushioning some of the risks of the banks to AMCON.


There has also been the argument that the foreign bidders should be considered because of their demonstrated capacity for enhanced capital support, technical competence, experience, reach and technology necessary for the fast turnaround of the rescued institutions. The CBN had following the joint examination on the affected banks last year, which found their financials in “grave condition”, sacked the executive management of the banks and injected fresh N620 billion in them in the form of tier two capital to enable them continue to meet their obligations. The CBN later called on interested parties to bid for stakes in the institutions.





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