In what started like a rumour on Sunday, Diamond Bank on Monday afternoon announced its merger with Access Bank.
A statement by the bank’s Secretary/Legal Adviser, Uzoma Uja, sent to the Nigeria Stock Exchange (NSE), indicates that transaction is expected to be completed by the first half of 2019.
The statement reads in part: “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 two (2) New Access Bank ordinary shares for every seven (7) Diamond Bank ordinary shares held as at the
“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.
The disclosure further stated that “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.
The deal when it is finally completed will make Access Bank the biggest retail bank in Nigeria.
It will be recalled that Access Bank after 2009-2010 Central Bank of Nigeria’s (CBN) intervention bought over Intercontinental Bank.
And only recently, Diamond Bank has been troubled after one of its foreign investors pulled out.
