Access Bank Plc (“Access”) and Intercontinental Bank Plc (“Intercontinental Bank”) announce that both Banks have convened shareholders meetings in relation to the proposed business combination (“the Transaction”) between Access Bank and Intercontinental Bank.
The Transaction, which in its first phase will be effected through a Scheme of Arrangement (“the Scheme”) and a Private Placement was agreed by the Boards of both Banks through the execution of a Transaction Implementation Agreement (TIA) on July 6th, 2011. Subsequently, Intercontinental Bank will be merged into Access Bank. The Scheme has received necessary Regulatory and Judicial approvals and is now subject to approval by Access Bank and Intercontinental Bank Shareholders at their respective General Meetings, scheduled to take place on Monday, 26th September, 2011.
Access Bank and Intercontinental Bank invite their Shareholders to participate in the creation of one of Africa's largest financial institutions, with the combined entity offering unique opportunities for both institutions and excellent prospects for future growth for shareholders.
The combined entity offers:
· Ownership participation in one of Africa's largest Banks, with the combined entity becoming one of the top banking institutions in Nigeria by asset size with a strategic branch network of over 500 branches across the country and over 5 million customers
· The creation of substantial value through both the revenue benefits and cost reduction expected to flow from the synergies and benefits derived from combining Intercontinental Bank's Retail banking network with the Wholesale and Commercial banking strength of Access Bank
· A safe harbour for the depositors of Intercontinental Bank while ensuring that Intercontinental Bank meets the Central Bank of Nigeria 30th September recapitalization deadline
· A management team with extensive experience in integrating acquisitions into the business to the benefit of shareholders combined with a proven culture of adherence to best practices in corporate governance and a track record of professional excellence
· A market driven, fair and transparent recapitalisation solution for Intercontinental Bank that safeguards a significant degree of systemically important capacity in the Nigerian banking sector
Commenting on the transaction, Aigboje Aig-Imoukhuede, Chief Executive Officer of Access Bank, said: “Access has critically analysed inorganic growth opportunities as they have arisen since the Central Bank of Nigeria's (“CBN”) special examination in 2009. We have identified Intercontinental as an entity which will significantly complement our business model and support our growth ambitions. The Transaction enhances our retail banking offering and extensively increases our distribution platform through Intercontinental Bank's impressive branch network thereby consolidating Access Bank's position as a market leader in the Nigerian banking sector. Our protection of shareholder returns remains a priority and the proposed combination with Intercontinental has been entered into with the view of enhancing shareholder returns for both entities over the medium to long term, while also preserving the capacity and stability of the Nigerian banking sector. The Transaction exemplifies how the private sector can relieve the Government from its lender of last resort function and demonstrates how its expertise and entrepreneurial spirit relieves the taxpayer from supporting the industry, saves jobs and brings much needed confidence to Nigeria's banking sector.”
Mahmoud Alabi, Chief Executive Officer of Intercontinental Bank, added:
“The Board of Directors of Intercontinental Bank is of the belief that the Transaction contemplated in the Scheme will provide considerable benefits and opportunities to the shareholders, customers, staff and other stakeholders of the Bank. Critically, the process will ensure that the Bank meets the CBN's 30th September recapitalization deadline, enabling shareholders to preserve some value in the Bank. The Transaction marks an exciting opportunity for the Bank and our stakeholders to become part of one of the top banking institutions in Nigeria by asset size supported by the combined strength of the banks' strategic branch networks and banking operations.”
· The Transaction will be effected through a Scheme of Arrangement and a Private Placement and will involve the initial acquisition of a super majority interest in Intercontinental by a special purpose vehicle, Project Star Investments Limited, wholly owned by Access Bank while the remaining shares will be owned by AMCON and Intercontinental Bank's existing shareholders
· Subsequent to the approval of the Scheme of Arrangement and Private Placement by shareholders, Intercontinental Bank will be merged into Access Bank within 12 months via a Scheme of Merger. The combined entity will remain headquartered and incorporated in Nigeria, with its shares listed on the Nigerian Stock Exchange
· As part of the Transaction, the Asset Management Company of Nigeria (AMCON) shall bring the net asset value (NAV) of Intercontinental Bank to Zero through the injection of the Financial Accommodation amount
· Following the reduction of NAV to zero by AMCON, Access will recapitalise the bank via a N50 billion capital injection bringing the Bank's Capital Adequacy Ratio (“CAR”) beyond the CBN's requirement of 10% CAR for deposit money banks in Nigeria
· The Scheme is subject to Access Bank's and Intercontinental Bank's shareholder approval at the General Meetings. The Transaction is also subject to various approvals including but not exclusively the Central Bank of Nigeria, Securities and Exchange Commission and The Federal High Court of Nigeria.
Expected Timetable to Completion
The Transaction is expected to be completed before September 30th, 2011.