Central Bank of Nigeria (CBN) has given its pre-merger consent to on-going merger negotiations between IBTCChartered and Standard Bank of South Africa, Businessday learnt in Abuja yesterday.
Officials of the Security and Exchange Commission also told our reporters last night that an application for a similar consent has been filed by IBTCChartered and that request was being considered. But despite the progress so far made, Businessday learnt that no timeframe has been fixed for the consummation of the merger especially because of the long regulatory journey that still has to be travelled.
According to a leading Lagos commercial attorney \"it does not help the process to set a time limit especially now when you still have to get regulatory approvals.\"
Both IBTCChartered and Standard Bank which jointly acknowledged their romance on September 27 appear now to have made significant progress in their quest for a merger which analysts say could define AfricaÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡Ãƒâ€šÃ‚Â¬ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¾Ãƒâ€šÃ‚Â¢s banking sector, although it would seem that valuation and especially the premium which Standard Bank will pay for a majority stake in IBTCChartered could hold the key to the success of the negotiations.
Commissioned separately by both parties, KPMG and Delloitte have just turned in their own independent due diligence reports and no surprises were reported, thereby giving fresh impetus to the merger negotiations, increasing the hunger for an early deal.
Craig Bond, the CEO of Standard BankÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡Ãƒâ€šÃ‚Â¬ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¾Ãƒâ€šÃ‚Â¢s Africa unit admits he would have to pay a premium but it is unclear what the Atedo Peterside team at IBTCChartered will be seeking.
However, failure to agree the right price remains potentially the main deal breaker. Peterside led by his Chairman Olu Akinkugbe were in Johannesburg early this week to meet with directors of Standard Bank and bankers and lawyers in Lagos say they expect IBTCChartered will seek the best possible premium.
BusinessDay reporters in Lagos and Johannesburg following the negotiations have been attempting to identify what both parties to the merger are seeking.
According to them, for Standard Bank with claims to being AfricaÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡Ãƒâ€šÃ‚Â¬ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¾Ãƒâ€šÃ‚Â¢s largest Bank, having its weakest link in Nigeria, AfricaÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡Ãƒâ€šÃ‚Â¬ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¾Ãƒâ€šÃ‚Â¢s largest oil producer and the continentÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡Ãƒâ€šÃ‚Â¬ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¾Ãƒâ€šÃ‚Â¢s most populous nation, leaves a critical gap in the bankÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡Ãƒâ€šÃ‚Â¬ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¾Ãƒâ€šÃ‚Â¢s continental platform. It believes IBTCChartered helps fill this void.
Before talking to IBTCChartered, Standard had first approached GT Bank and when that failed, it aimed to be core investor in Afribank but when BPE abandoned the core-investor sale, it pointed its guns at the old UBA but Standard Trust Bank suddenly showed up on Christmas eve when it was thought every one was on holiday and pulled the rug off Standard BankÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡Ãƒâ€šÃ‚Â¬ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¾Ãƒâ€šÃ‚Â¢s feet. The bank then approached Oceanic Bank but progress was slow.
According to our reporters, for IBTCChartered, the story appears to be slightly different. The bank today ranks 8
th by way of profit before tax and analysts said it cannot hope to catch up by continuing to do the same things, not cutting corners.
A deal with Standard Bank offers it an instant window to leapfrog to the top five in Nigeria by leveraging the global network that Standard Bank has meticulously built over the years.
According to a teacher at the Lagos Business School, \"Peterside has given his best and built an enviable institution that IBTCChartered is today. As with people who found businesses, a time comes when you must let your business grow beyond the founder. For Atedo, I think that time has come and his boldness is commendable.\" - businessday