—-Shareholders to Get N1.00 Per Share in Cash and N2.13 kobo by Way of Shares.
December 19, 2018
By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-Access Bank Plc which had announced a merger with Diamond Bank Plc to create Nigeria’s and Africa’s largest retail bank by customers confirmed it has already finalised terms and obtained regulatory approvals for a Tier II capital issuance, which will raise $250 million, available for drawdown in January 2019, according to Herbert Wigwe, CEO of Access Bank.
Wigwe said the top tier lender has also obtained “No Objection” from the Central Bank of Nigeria (CBN) to undertake a Rights Issue to raise up to N75 billion ($ 207 million) in the half year (H1) period of 2019.
According to CEO of Access Bank, shareholder approvals and other regulatory approvals will be obtained before the offer opens and will accelerate the capital management plan to support retail growth, and to keep its capital adequate and in line with regulatory requirements.
Wigwe commenting on the merger between the two banks, which is expected to be completed in the first half of 2019, said: “I am delighted to announce that we have received the necessary regulatory approvals to pursue a merger with Diamond Bank, one of Nigeria’s foremost digital and retail banks, subject to final regulatory and shareholder approvals. The combination of our two businesses will create the largest retail bank in Africa by customer base and a very significant player in the Nigerian market. This is a huge step towards the delivery of our goal to bring the power of banking to millions of people across Nigeria and an exciting transaction for Access Bank and Diamond Bank’s customers, staff and shareholders.
“We have a clear plan to maintain our capital strength and are announcing today decisive steps by both banks to ensure their financial stability throughout the process. The overall outcome will be a stable institution with an extremely strong capital adequacy ratio of more than 20 percent following completion of the merger, which will be a leading competitor in all the markets in which it operates,” he added.
On his part, Uzoma Dozie, CEO of Diamond Bank said the merger is positive for all of Diamond Bank stakeholders, including customers, employees and shareholders. In particular, customers will benefit significantly through the unrivalled combination of the best of Diamond Bank’s retail and digital leadership with the size of Access Bank’s balance sheet, corporate names and geographical reach.
According to him, in reaching this decision, the shared passion for leveraging Nigeria’s youthful and entrepreneurial talent, and a commitment to better outcomes through financial inclusion have convinced us that this is the right combination.
“I believe that the combination of two strong and admired brands, with shared values and complementary strengths, will be a strong force for positive change in the Nigerian and African retail landscape. As a result, this merger creates significant potential for sustainable long-term growth which stands to benefit customers, employees and shareholders alike,”Dozie affirmed.
Following the signing of the Memorandum of Agreement and announcement of headline terms, which valued Diamond Bank at approximately N72.5 billion ($200m) and will see Diamond Bank shareholders receive N3.13 per share in cash and shares.
According to Wigwe, shareholders of Diamond Bank would receive N1.00 per share in cash and N2.13 kobo by way of shares.
Diamond Bank is expected to benefit from Access Bank’s strong culture of risk and capital management expertise and a clear strategy for sustainable growth. Access Bank will take advantage of Diamond Bank’s unparalleled retail banking expertise and strong digital offering. Together, the two companies would create one of Nigeria’s leading banks, with 29 million customers, including more than 13 million mobile customers, as well as 3,100 ATMs and around 32,000 PoS terminals.
Shares of Diamond Bank at the close of Wednesday’s trading on the Nigerian bourse appreciated 9.65 percent to N1.25 from N1.14 traded the previous session, gaining 11 kobo per share.
While Access Bank shares also gained 2.60 percent to N7.90 from N7.70 traded previously, appreciating by 20 kobo per share
