Standard Bank Group pay 17% premium to take stake up to 65% in Nigerian subsidiary

Standard Bank Group-Africa’s largest financial institution, dug deep into its Nigerian business last week with the acquisition of additional shares worth N61.3 billion in Stanbic IBTC Holdings Plc to increase its majority equity stake in the Nigerian subsidiary to 64.44 per cent.

In a regulatory filing announcing the transaction, Company Secretary, Stanbic IBTC Holdings Plc, Chidi Okezie, confirmed that Stanbic Africa Holdings Limited, a wholly owned subsidiary of Standard Bank Group Limited, has acquired additional 1.14 billion ordinary shares of 50 kobo each in Stanbic IBTC Holdings. Stanbic Africa Holdings Limited represents Standard Bank Group in Nigeria as the parent company of Stanbic IBTC Holdings Plc. The acquisition was done in an “off-market” transaction.

“With this acquisition, the total percentage shareholding of Stanbic Africa Holdings Limited in Stanbic IBTC has increased by 11.35 per cent from 53.09 per cent to 64.44 per cent post this transaction,” Okezie said.

Sources in the know about the deal said the South African banking group had opted to buy the Stanbic IBTC Holdings shares at premium. The deal was struck at N53.75 per share, considerably higher than Stanbic IBTC Holdings’ current market price of N46.10 and 52-week highest price of N50.05 per share at the Nigerian Stock Exchange (NSE). The shares were transferred to Stanbic Africa Holdings in eight deals, which were consummated through the NSE.

As an off-market, negotiated cross deal, it means that the deal was not subjected to the dynamics of price discovery for the particular period. Off-market trade implied that the deal was sealed outside NSE floor.

The negotiated cross deal platform of the Exchange is a special-purpose trading platform that is meant for voluminous transaction. By the cross deal, it implies that the buyer and the seller had been pre-arranged and the transfer at the stock market was a mere perfection of the agreement between the two. The negotiated cross deal allows the parties to close the deal at reduced cost.

Stanbic IBTC Holdings recorded its most profitable year since inception of the bank in 2017. Key extracts of the audited report and accounts of Stanbic IBTC Holdings for the year ended December 31, 2017 showed that gross earnings rose by 36 per cent while profit after tax jumped by 70 per cent.

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