Proshare Logo
   Market Date: 25-07-2014   
Agriculture All One Min News Archives Bonds Cap Mkt Sentiments Capital Market CASHLESS NIGERIA Commodities Corporate Earnings Daily & Weekly Market Updates Enterpreneurship ETFs Forex Frauds & Scandals General Global Market Insurance Investors NewsBeat Islamic Finance Mergers & Aquisitions Money Market Mortgage Mutual Funds Nigeria Economy Oil Sector Opinions and Analysis Pensions People Personal Finance Politics Power Products & Services Professionals Property Public Offers Private Placements Regulators REITs Stock PICKS Taxation Telcos Travel & Tours Unlisted Stocks World of Business

ETI and Oceanic Bank Plc in Share Exchange Deal

Category: Investors NewsBeat


  Read (3230)
ETI and Oceanic Bank Plc in Share Exchange Deal

 

 

Monday, 01 August 2011 00:00 Anthony Osae-Brown & Blessing Anaro
 
•Acquisition may be first completed by any of the rescued banks
 
Barely a week after shooting to the number one position in Ghana, Ecobank Transnational Incorporated, ETI has struck a surprising all-shares-exchange deal to acquire Oceanic Bank Plc and now looks set to enter the top five bracket in the Nigeria market.
 
ETI is the African banking conglomerate operating via 760 branches in 32 countries including Nigeria and boasts the best network in Africa but the deal with Oceanic Bank which was announced yesterday in Lagos creates for the banking group, the scope which has always eluded it in what is easily the continent’s largest market by population.
 
Those close to the deal say Thursday marked the turning point in the contacts and negotiations which only climaxed just before midnight on Saturday and the transaction could see shareholders of Oceanic Bank better off by between 20-30 per cent when compared to the deal offered by First Bank earlier this year.
 
The swiftness of the agreement is said by analysts to reflect the hunger in both parties and their satisfaction with the terms on the table.
 
Both parties were saying last night that the transaction agreement they have signed will ensure that the acquisition will become the first to be completed among the banks brought under Central Bank of Nigeria (CBN) management because “both groups see value in the transaction and we have been able to carry every one along”, one source told Businessday.
 
Speaking at an early Sunday morning press conference to announce the deal, John Aboh, the MD/CEO of Oceanic Bank Plc said the deal will create Nigeria ’s second biggest bank by branch network. The potential bank which will see the merger of Ecobank Nigeria and Oceanic Bank will have a network of 620 branches spread across Nigeria .
 
However, the merger will not involve cash injection into Oceanic Bank. “This will not involve cash. The merger will be consummated through an exchange of shares. Oceanic Bank shareholders will be given shares of ETI.” Aboh explained.
 
Aboh further disclosed that the board of Oceanic met on Thursday and picked ETI as the preferred partner, while both banks moved to sign the Transaction Implementation Agreement (TIA) on Saturday.
 
“Both banks will now begin the process of seeking shareholder and regulatory approvals in accordance with the relevant laws of the Federal Republic of Nigeria, including the provision of full transaction details to shareholders at the appropriate time,” according to a statement from the bank.
 
Aboh also revealed that the CBN “has conveyed its “no objection” for Oceanic Bank to enter into the transaction implementation agreement with ETI.
 
The bank’s press release further affirms that “The board of directors of Oceanic Bank remains confident that a transaction will be completed within the required time line to comply with the Central Bank of Nigeria deadline of September 30, 2011.
 
“We believe shareholders will be happy with the deal. It is the best deal for both shareholders and the employees of Oceanic Bank,” said Hayford Alile, Chairman Oceanic Bank, who was also at the press conference.
 
BusinessDay analysis shows that based on both banks second quarter results for 2011 released last week, a merger of Ecobank Nigeria and Oceanic Bank will create a bank with total deposits of N928 billion, making  it the fifth biggest bank by deposits in the Nigerian banking industry. Oceanic closed the second quarter of 2011 with a deposit base of N567 billion while Ecobank closed the same period with a deposit base of N361 billion as of June 30, 2011.
 
ETI six months revenues were up 24% to $506 million by June 30, 2011: Profit before tax up 30% to $134 million: Net income up 34% to $94 million: Basic earnings per share up 36% to 0.82 $ cents: Capital adequacy ratio of 19.5%
ETI has about 180,000 shareholders and its largest shareholders include IFC 11.9%, Renaissance Direct Investment Limited 9.1%.
 
For its part, Ecobank Nigeria closed the half year with a positive capital base of N75 billion, Oceanic closed the same period of with a negative shareholder fund of N86 billion, the lowest among the rescued banks. Also at Friday, while Oceanic price closed at N1.01 per share, Ecobank Share price closed at N2.77 per share while ETI Share price closed at N15 per share on Friday.
 
Source: BusinessDay
 

http://www.prosharetest.com/quote/ETI

http://www.prosharetest.com/quote/OCEANIC

 



Tags: , 



Comment With Your Facebook or Yahoo! ID


Latest news


News on Investors NewsBeat

About Us

Who We Are
Our Team & Partners
Corporate Governance
Advertise with Us
Subscribe / Unsubscribe
Site Map
News Feed - RSS
Newsletter
Contact Us
Message from CEO
Resources

News & Features
The Analyst / Market Data
Investor Relations Portal
The Regulator
Economy & Politics
WebTV
Training Portal
Events Calendar
NewsStands - Online Reputation

Products and Services

Research & Market Intelligence
Analyst Services
Offers & Rights Support Service
Investor Relations Services
Alert & Subscription Services
Share Support Services
Proshare Consult
Event & Seminar Coverage
Market Directory
File a Complaint
News & Analysis

#1minNews
News from TheANALYST
Video News from WebTV
Money Market Updates
Opinions & Analysis
Nigerian Economy
Market Data
The Regulator
Newsletters
Discussion Forum
Policy

Subscriber Agreement
Privacy Policy
Data Policy
Disclaimer
Copyright Policy
Trademarks
Comments in Site
Advertising Code
Conflict of Interest
Content Partnership
3rd Parties

Online Trading and Execution
Training
Legal Support Services
Web/Technology Services
File a Complaint