By Festus Akanbi, 27 Feb 2011

After months of speculation and boardroom manoeuvring, a clearer picture of core investors for some of the rescued banks has begun to emerge. Investigations last week showed that the memoranda of understanding for the various mergers and acquisition is still being kept under wraps pending the official endorsement by the Central Bank of Nigeria any time from this week.

 

By the weekend, some of the banks with concrete merger and acquisition plans include Sterling Bank Plc, Afribank Plc, BankPHB Plc,Union Bank of Nigeria Plc, Intercontinental Bank Plc and Oceanic Bank Plc.

Though not one of banks rescued by the CBN in 2009,Sterling Bank,  it was gathered, has been pursued relentlessly by South African bank, FirstRand Bank Limited, which has expressed interest in acquiring a stake in the bank and is currently undertaking due diligence of its operations. FirstRand is said to be very keen in closing a deal with Sterling’s directors and shareholders.

 

However, THISDAY learnt that stakeholders of Sterling Bank are not in a hurry to seal the acquisition bid, because they do not want the Nigerian bank to be sold for peanuts.

 

Consequently, arrangements are being put in place to raise Sterling Bank’s capital base through a Tier 2 capital issuance (bond) of N7.5billion, which would enable the bank shore up its shareholders’ funds and make it eligible to apply for a national banking licence before the deal with FirstRand is finally consummated.

 

Afribank, on the other hand, is said to have wrapped up a deal with the Vine Capital consortium, a private equity firm led by Tosa Ogbomo, former managing director of a Goldman Sachs division in New York , and Kalil Udalor, also an investment banker with international experience. According to an industry source, Vine Capital’s acquisition of Afribank has been signed, sealed and delivered, as initial arrangements with Nigeria ‘s Fidelity Bank Plc and South Africa ‘s Ned bank fell through.

 

It was gathered that Vine Capital is also in a serious discussions with Finbank Plc. The plan by the shareholders of Vine Capital is to acquire Afribank and Finbank and to merge both entities to produce a bigger bank that has the scale to match the likes of FBN, United Bank for Africa Plc and Zenith Bank Plc.

 

First City Monument Bank had previously been tipped to acquire Finbank, but sources confirmed the Ladi Balogun-led bank has backed down, paving the way for Vine Capital to take over the bank.

 

The source, who could not ascertain what name the emerging entity would adopt after the proposed merger, disclosed that the duo of Ogbomo and Udalor plan to run the emerging institution themselves by providing not only capital but also a management team.

 

In the case of Union Bank, another private equity firm, African Capital Alliance (better known as Capital Alliance), is interested in taking over Union Bank. ACA is believed to be putting a bid other Nigerian investors through a special purpose vehicle.

 

Chances of Capital Alliance were brightened recently following the insistence of the current management of the bank to resist the alleged attempt by some former directors to buy into the bank. The bank was almost brought to its knees recently when it had to contend with union problems spearheaded by its staff.

 

BankPHB, it was learnt, is a little precarious as the ongoing bid by a core investor is said to have reopened old wounds inflicted by some irreconcilable differences during the 2005 consolidation exercise.

 

Habib Bank of Pakistan is said to be interested in BankPHB, in which it intends to inject more capital. However, some legacy issues that occurred during the merger of former Platinum Bank and Habib Bank in 2005 are said to be rearing their heads again.

 

A source within the bank said the rivalry also played out during the ouster of its former managing director, Mr. Francis Atuche in 2009.

 

The source said the crisis started after the emergence of Platinum Bank as the senior partner in the merged BankPHB despite the fact that Habib Bank was the bigger of the two and had better asset quality before the merger.  But at the end of the exercise, Platinum was positioned as the stronger of the two, resulting in divisions among the directors and shareholders from both banks.

 

According to him, the appointment of Kola Abiola as chairman of the bank was intended to checkmate the perceived excesses of Atuche. He said the division which the process created on the board of the bank became a ready tool for the CBN Governor, Sanusi Lamido Sanusi, during 2009 bank audit that led to the removal of Atuche. Under the present arrangement, board members sympathetic to Habib Bank of Pakistan are said to be paving the way for the bank so that they can have an upper hand.

 

Meanwhile, Access Bank is said to be making headway in its planned acquisition of Intercontinental Bank. Access is said to be looking for scale, which the acquisition of Intercontinental Bank can give it.

Access Bank has been looking to buy into a large bank for some years, and previously indicated interest in Afribank long before the banking crisis, but the move was rebuffed by its (Afribank) shareholders. The current effort to take over Intercontinental Bank is said to have the tacit approval of the CBN.

THISDAY learnt that First Bank is also eyeing Oceanic Bank, with sources confirming that it is almost a done deal. The move by First Bank is said to have been encouraged by CBN in exchange for approval being sought by the bank to shut down some its unprofitable branches in small towns and rural areas.

 

First Bank and some other first generation banks are by virtue of their age and former government ownership, have branches in virtually all the nooks and crannies of the country. But it was gathered that some of the branches are not profitable.

However, because the apex bank discourages the closure of bank branches, it is encouraging acquisition of a weaker bank as a precondition to allow FBN scale down on its unprofitable branches.

Source: Thisday