Expect completion of Diamond, Access Bank merger in mid-2019—Board
Whereas it is no more news that name ‘Diamond Bank’ is heading to extinction vide the ongoing hostile acquisition by Tier I financial institution, Access Bank, strong indication emerged Tuesday from the Board of Diamond Bank Plc that it expects conclusion of the buy over transaction of its merger with Access Bank Plc in the first half of 2019.
A terse statement from the board averred that “Diamond Bank expects the transaction to complete in the first half of 2019.”
The bank said that following a strategic review leading to a competitive process, the board had selected Access Bank as the preferred bidder with respect to a potential merger of the two banks that would create Nigeria and Africa’s largest retail bank by customer base.
However, the association of Diamond Bank Shareholders had in a petition last weekend, warned against the move, complaining that they were not carried along as the preliminary responses of the bank was denials of the transaction until it become uncoverable.
But to douse the fears of Diamond Bank shareholders, the Head, Banking and Finance Department, Nasarawa State University, Prof Uche Uwaleke, argued that “By this merger, Access Bank has emerged as one of the biggest banks in Africa by customer base. The scheme of the merger is a win-win for the shareholders of the two banks.
He explained that “The purchase consideration is fantastic at over N3 per share for a target bank whose share price is less than N1 per share.”
Besides, the Diamond Bank Board insists 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 two new Access Bank ordinary shares for every seven 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 as of December 13, 2018, the date of the final binding offer.
“Immediately following completion of the merger, Diamond Bank would be absorbed into Access Bank and it will cease to exist under Nigerian law. The current listing of Diamond Bank’s shares on the NSE and the listing of Diamond Bank’s global depositary receipts on the London Stock Exchange will be cancelled, upon the merger becoming effective.”
To end speculations, the Chief Executive Officer of Access Bank, Herbert Wigwe, assured that “Access has a strong track record of acquisition and integration and has a clear growth strategy. Access and Diamond have complementary operations and similar values, and a merger with Diamond Bank, with its leadership in digital and mobile-led retail banking, could accelerate our strategy as a significant corporate and retail bank in Nigeria and a Pan-African financial services champion.
“Access 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 and Diamond customers, staff and shareholders.”
