December 23, 2011
SHAREHOLDERS of Ecobank Nigeria Plc, yesterday, approved the bank’s board’s proposal to conclude merger agreements with Oceanic Bank Plc, after Ecobank’s parent firm Ecobank Transnational Incorporated (ETI) acquired 100 per cent stake in the troubled financial institution in September.
Already, the shares of Oceanic Bank have been delisted from the official list of the Nigerian Stock Exchange (NSE), while shareholders in the enlarged Ecobank will get one share in ETI for every 5.16 Ecobank shares owned.
Besides, at the end of the merger, ETI will own the merged entity, while the shares of Ecobank will subsequently be delisted from the Nigerian Stock Exchange.
Under the merger agreement, N2.6 billion is to be credited to Oceanic bank shareholders as a deposit for shares in Ecobank Nigeria and issued to Oceanic bank shareholders as equity at N2.34 per Ecobank Nigeria share, following the approval of the proposal that the shareholders of Oceanic Bank receive 16.1 billion new shares in Ecobank Nigeria.
Speaking at an extra-ordinary general meeting in Lagos yesterday, the Chairman of Ecobank, Dr. Sonny Kuku, said that the bank deemed it necessary to seek the approval of the shareholders to conclude the merge arrangement despite ETI’s equities holding in the bank.
He also advised the shareholders not to cash in on their investments in the bank, as the value of the bank’s share will improve later.
ETI’s Chief Executive Officer, Arnold Ekpe, recently noted that ETI would complete merging the operations of its Nigerian unit with Oceanic before the end of 2012 and that the legal merger would be completed this year.
Urging the shareholders to embrace the merger deal, Kuku explained that the acquisition of Oceanic Bank will result in a number of key benefits for the shareholders of both ETI and Oceanic Bank, as well as for Nigerian financial services in general.
According to him, the proposed merger will aid the enlargement of Ecobank’s balance sheet size in excess of N1.32 trillion upon consolidation, thereby enhancing its ability to finance larger transactions particularly in the upstream oil and gas sector, as well as the infrastructure sector, while complementing the Ecobank’s multi-national and local corporate clientele with oceanic bank’s public sector and retail customers in order to increase business opportunities for the enlarged merged entity.
On his part, one of the bank’s shareholders, Nona Aworh, urged the company to always consider shareholders with minority holdings in the bank in the decision making process of the company in order to enhance fair representation.
Similarly, the National President, National Shareholders Solidarity Association (NSSA), Timothy Adesiyan, commended the bank for taking the bold step to enhance the merger of the two banks but urged the company to ensure that the value of shareholders’ investments do not depreciate.
ETI noted recently that it obtained a $285 million loan from South Africa’s Nedbank to support its acquisition of Oceanic. Nedbank will be able to convert the loan into 20 per cent equity in Ecobank in 24 to 36 months, it said.