No formal request yet, says CBN SEC
Omodele Adigun, Uche Usim, Chinwendu Obienyi
The Board of Diamond Bank Plc has finally given nod to its acquistion by Access Bank Plc.
This is contained in a statement made available to Daily Sun on Monday by the bank as the news outlets were awash with the corporate marriage between the two institutions.
This is coming after several denials of merger and acquisition talks between the two banks.
However, the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) have acknowledged that both parties have been in talks for some time, but that none of them has formally sought any request from the two regulators to formalie the deal.
READ ALSO Sterling Bank powers West Africa’s largest food festival
CBN spokesman, Isaac Okorafor, in a text message to Daily Sun said “We are aware of meetings going on but we are yet to receive any formal request from any of the parties”.
SEC, on its part, explained in a terse statement, that it was aware of their intention to go into a merger.
The statement read: “Access Bank and Diamond Bank have both notified the Commission and the general public.
It is a notice to merge, they have not merged yet. SEC is awaiting their application on the matter.
“The SEC received on Monday, Dec 17 2018, notice of intention by Diamond Bank & Access Bank to merge. The Commission is currently waiting for their formal Application”.
Few weeks ago when the news of planned acquisition broke out, Diamond Bank hurriedly issued a rebuttal, describing the news as fake.
However, the bank, in a statement made available to Daily Sun yesterday, announced that it has selected Access Bank as the preferred bidder with respect to a potential merger of the two banks that will create Nigeria and Africa’s largest retail bank just as the Board of Diamond Bank believes that the merger is in the best interest of all stakeholders including employees, customers, depositors and shareholders and has agreed to recommend the offer to Diamond Bank’s shareholders.
The statement further said that the proposed merger would involve Access Bank acquiring the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a Scheme of Merger.
“Based on the agreement reached by the Boards of the two financial institutions, Diamond Bank shareholders will receive a consideration of N3.13 per share, comprising of N1.00 per share in cash and the allotment of 2 New Access Bank ordinary shares for every 7 Diamond Bank ordinary shares held as at the Implementation Date. The offer represents a premium of 260 per cent to the closing market price of N0.87 per share of Diamond Bank on the Nigerian Stock Exchange (NSE) as of December 13, 2018, the date of the final binding offer,” it said.
Uzoma Dozie, Diamond Bank CEO, while confirming the development, said that the re-licensing of Diamond Bank as a national bank supports its objective of streamlining its operations to focus resources on the significant opportunities in the Nigerian retail banking market, and the economy as a whole.
According to him, “the change to national bank status also enables the bank to maintain a lower minimum capital requirement of 10 per cent, as against 15 per cent required for international banks.
The board of Diamond Bank believes that the proposed combination of the two operations provides an exciting prospect for all stakeholders in both businesses and will create a financial institution with the scale, strength and expertise to capitalize on the significant opportunities in Nigeria and sub-Saharan Africa more broadly”
Corroborating, Access Bank CEO, Herbert Wigwe, said that Access Bank has a strong track record of acquisition and integration and has a clear growth strategy while adding that both have complementary operations and similar values.
Wigwe said, “Access Bank has a strong financial profile with attractive returns and a robust capital position with 20.1 per cent CAR as at 30 September 2018.
We believe that this platform, together with the two banks’ shared focus on innovation, financial inclusion and sustainability, can bring benefits to Access Bank and Diamond Bank customers, staff and shareholders.”