Access Bank To Pay N3.13 Per Diamond Bank Share, Releases Merger Details

In separate letters, the boards of Access Bank Plc and Diamond Bank, on Monday morning wrote to their stakeholders through the Nigerian Stock Exchange (NSE), officially intimating them of the signing of a Memorandum of Agreement (MoA) regarding a potential merger of both institutions.
The letter by Sunday Ekwocha, company secretary of Access Bank, said the potential merger, which followed “its selection as preferred bidder after a competitive process undertaken by the board of Diamond Bank will create Nigeria’s and Africa’s largest retail bank by customers.”
Access Bank is to acquire 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 that will see the latter’s shareholders receiving N3.13 per share, representing 260% of its closing price on Friday, December 15, 2018.
According to Investdata Research Findings, Diamond Bank’s has a 52-week high of N3.73 per share.
The N3.13 per share would however comprise of N1.00 cash consideration per Diamond Bank share, representing total cash amount of N23.16bn, or $75.588m; and allotment of 6,617,253,991 new shares of Access Bank, representing two new Access Bank shares for every seven Diamond Bank units.
“The offer premium is 260% to the closing market price of 87 kobo per share of Diamond bank on the Nigerian Stock Exchange as of December 13, 2018, the date of the final binding offer,” Ekwoche added.
While the transaction is subject to formal regulatory and shareholder approvals, Herbert Wigwe, chief executive of Access bank noted that the latest move is in line with its record and clear strategy of acquisition and integration.
Access and Diamond banks, he continued, “have complementary operations and similar values and a merger with Diamond 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.
“…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.”
On his part, Uzoma Dozie, CEO of Diamond Bank believes the proposed combination with Access Bank creates one of Africa’s leading financial institutions, besides indicating a clear strategic rationale for the merger, besides the strong complementarities between both institutions.
In its own notice to the NSE, the board of Diamond Bank agreed “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 notice by Uzoma Uja, company secretary/Legal Adviser of Diamond Bank added: “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.”
Diamond Bank expects the transaction to be completed in the first half of 2019.
With the acquisition, Diamond Bank may no longer put its UK arm for sale, as Access Bank may merge it with its UK subsidiary.