I get it – Nigeria is an interesting place. But on this Diamond Bank issue, if another group of investors makes a counter offer, above $200m Access Bank is acquiring it, would the law demand that offer be considered?
For a public company – I had expected a window for counter-offers. This morning, some people are coming together: they want to save Diamond Bank. (Do not count on that; many are traders in Aba and Onitsha. They became wealthy because of Diamond Bank and are unhappy.)
Can someone explain what the law states on public companies? Are they required to wait for counter offers before consummation of deals?
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The Board of Diamond Bank Plc (“Diamond Bank”) today announces that following a strategic review leading to a competitive process, the Board has selected Access Bank Plc (“Access Bank”) as the preferred bidder with respect to a potential merger of the two banks (“the merger”) that will create Nigeria and Africa’s largest retail bank by customers.
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. Completion of the merger is subject to certain shareholder and regulatory approvals.
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% 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
The fact is this: Diamond Bank is more than $200M (or N62 billion at official rate). If you recover debts from its top 4 debtors (sorry, I cannot share them), the bank would be whole. Why should it be sold that cheap?
Yes, the top 4 debtors could technically save the bank. I do not get this $200m valuation – the bank’s real estate value alone is more than N62 billion: branches and HQs in VI and Ikoyi will bring in at least N20 billion. Add PHC, Abuja, Kano, and Other Lagos, you get excess of N62B. Yet, it went for N62 billion.
What is happening here?
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