NCB’s offer for Guardian lapses amid review by regulator
The takeover offer by NCB Financial Group for Guardian Holding Limited of Trinidad has been allowed to lapse, even though the take up went beyond target.
What that means exactly for whether the acquisition bid is dead or dormant will become clearer on Monday when the parties meet at the Trinidad & Tobago Securities and Exchange Commission to discuss complaints against NCB and the regulator’s review of the takeover bid.
“The offer has unfortunately lapsed due to the failure of condition 2.4.5 of the offer,” NCB Financial said in a market filing on Friday, which was released after the offer had closed. NCB did not explicitly state the precise rationale in ‘2.4.5’, which it deemed problematic, and calls for comment were unanswered.
The Jamaican banking group, which bid for the GHL shares though NCB Global Holdings, received acceptances from the 535 owners of 91.74 million shares, well clear of the 74 million shares targeted by the offer.
"Notwithstanding the lapse of the offer, the offeror and NCB Financial Group Limited are committed to participating in the hearing with a view to aiding the commission in completing its review of the offer,” the banking group said in a statement.
“In fact, the offeror has already submitted its position to the commission in respect of the allegations made in the press and by certain minority shareholders. It is the offeror’s firm and considered view that the allegations made in respect of the offer are each without merit".
Complaints were filed against NCB with TTSEC by minority owners of Guardian shares, who alleged a breach of Trinidad’s bylaws for takeovers, and were pushing for the Jamaican bank to adjust the offer price more in line with what it initially paid large shareholders for a stake in Guardian in 2016.
“I welcome this development and look forward to attending the procedural hearing at the commission's office on Monday,” said Trinidadian Peter Permell, an activist investor who has led the way in championing GHL minority shareholders.
NCB said none of the shares deposited up to the February 23 close of the bid have been taken up by the offeror.
NCB wants to increase its stake in GHL from 29.99 per cent to 62 per cent, in line with an agreement struck with the key shareholders when it bought into Guardian in 2016 at US$3.24 per share.
The lapsed offer was valued at US$174.4 million or US$2.35 per share.
What Section 2.4.5 says:
No government or governmental, supranational or trade agency or regulatory body or any court or other person having instituted or threatened any action, suit or investigation or enacted or made any statute or regulation or order or decision that might in the opinion of the offeror:
1. Make the acquisition of the offer shares by the offeror illegal or otherwise restrict or prohibit implementation of this offer,
2. Result in a delay in the ability of the offeror , or render the offeror unable to acquire some or any of the offer shares,
3. Require the divestiture by the company of all or any portion of its business, assets or property or impose any limitation on the ability of the company to conduct its business and or own its own assets or properties,
4. Impose material limitations on the ability of the offeror to acquire or hold, or to effectively exercise all rights of ownership of the offer shares, the offerors shares or any other shares the beneficial ownership of which is deemed to be vested in the offeror,
5. Otherwise adversely affect the GHL or the NCB Group.