The planned merger between Access Bank and Diamond Bank has now been officially unveiled by the management of the two lenders with letters sent to the Nigerian Stock Exchange (NSE) on Monday.
A statement by Uzoma Uja, Diamond Bank's Secretary/Legal Adviser, said the transaction will be completed by the first half of 2019.
“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,” Uja said in a letter to the Exchange.
"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."
Also, Access Bank in a separate letter to the NSE said it has signed a Memorandum of Agreement g (MOA) with Diamond Bank regarding a potential merger of the two banks that will create Nigeria and Africa'slagest retail bank by customers.
Access Bank intends to pay 26.6 billion naira cash and issue 6.6 billion worth of its shares to shareholders of Diamond Bank as the end of the consolidation of the two lenders.
"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 Diamond Bank's statement said.
According to Diamond Bank, founded by Pascal Dozie chairman board of directors of MTN Nigeria,
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 two lenders would have to obtain the consent of their shareholders and industry regulators before they could go ahead with the MoA.
According to the scheme of merger agreement sent by Access to the NSE, Access Bank will acquire the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank.
Based on the agreement reached by the Boards of the two financial institutions, Diamond Bank shareholders will receive a consideration of 3.13 naira per share, comprising of one naira 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
The offer represents a premium of 260 percent to the closing market price of 0.87 naira per share of Diamond Bank on the Exchange as of December 13, 2018, the date of the final binding offer.
Diamond Bank expects the transaction to be completed in the first half of 2019.
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