By Ademola Alawiye

Monday, 1 Nov 2010

Indications have emerged that Intercontinental Bank Plc and Union Bank Plc may finalise discussions with potential bidders this week.

Our correspondent gathered that the management of Intercontinental Bank was preparing to meet with a potential core investor later this week to discuss the conditions of the sale.

Also, Union Bank officials are set to hold talks with a local private equity firm in conjuction with a consortium to assess the bidding proposal.

The Central Bank of Nigeria had bailed out eight troubled banks last year with a N620bn lifeline. The bid to repay the Tier 2 capital by the rescued banks had sparked off merger and acquisition discussions among some players in the industry.

At least four of the eight rescued banks are set to hold exclusive talks with core investors this month.

The CBN after bailing out the troubled banks in an unprecedented rescue last year, said it was trying to find new investors to invest in the banks, saying that the banks had become so weakly capitalised that they posed a risk to the nation‘s economy.

The CBN Governor, Mr. Lamido Sanusi, said two weeks ago that five or six of the rescued lenders would be announcing negotiations in the coming weeks.

Sanusi had earlier said that the CBN had received good bids for some of the rescued banks put for sale, adding, however, that it would not just sell the banks without due consideration so as to protect the interests of shareholders.

He had said, “A number of foreign banks and private equity companies have expressed interest in the banks. We are being savvy with the biddings to protect shareholder value and, therefore, not every bid will be accepted. Some of the bids are very good; some are acceptable given where we stand. Given that we have the Asset Management Corporation of Nigeria and they can recapitalise the banks, we can get a better deal, so we don‘t have to accept every offer.”

The Federal Government set up AMCON to purchase non-performing loans from the rescued banks and chase their recovery in order to give the banks liquidity and make them more attractive to new investors.

Delays in setting up AMCON had hindered progress on reaching deals for the rescued banks.

Source: Punch