Dec 17 (Lagos) - Access Bank plc (
ACCESS ) will acquire Diamond Bank Plc (
DIAMONDBNK ) in a cash plus share deal.
Access will pay a cash consideration of N 1 per Diamond Bank share amounting to N 23.16 billion (USD 75.5 million).
Access will also issue 2 new access bank shares for every 7 diamond bank shares.
The offer represents 260% premium to the recent stock price of
DIAMONDBNK shares of 87 kobo per unit.
The total price per diamond bank share that
ACCESS will pay is N 3.13 per unit which is sharply above todays closing price of
DIAMONDBNK of N 1.04 per unit. At the same time we may not see price appreciation is Diamond Bank shares because the cash component is N 1 per unit which is lower than today's closing price of Diamond Bank stock.
Shares of
ACCESS rose by 9.4% today to N 8.15 per unit.
Shareholders will have to be careful here because that is a lot of money they are going to pay and a lot of shares they are going to create thereby diluting existing shareholders.
This deal will create a retail banking giant in Nigeria will is likely to dominate the sector given their prowess on technology and expansive footprint.
The transaction is likely to be completed by middle of 2019. That is when the
ACCESS shareholders will find out how much dilution occurred.
reporting for easykobo.com on Monday, Dec 17 2018 from Lagos, Nigeria