Shareholders of Capital and Credit Financial Group have three weeks to decide whether to sell their holdings to Jamaica Money Market Brokers at the offer price of J$4.55 per share.
JMMB has already secured agreements to acquire 81 per cent of the Capital & Credit's holdings but is seeking to acquire 100 per cent of the company.
On Thursday, when the offer was formally made, the CCFG stock was valued on the stock market at J$4.50, which put a mere five cents or 1.1 per cent premium on the offer. On Friday, CCFG inched up to J$4.52.
JMMB, however, is comparing its offer to the stock's performance in the months before August 2011 when it first announced its takeover bid, saying CCFG was then trading at J$3.40 on average. By that benchmark, the offer is priced at a 34 per cent premium, said JMMB.
The stock has traded as high as J$5 within the past year.
The offer for all shares in the company — which opened Friday, May 25, and closes Friday, June 15 — values the company at J$4.22 billion.
JMMB Securities Limited and Capital and Credit Securities Limited will act as brokers in Jamaica, while investors in Trinidad will deal with KPMG Regulatory & Compliance Services.
70 per cent in cash
Shareholders taking up the offer will be paid 70 per cent in cash and 30 per cent in JMMB stock. The JMMB stock has been valued at J$7.54 - equivalent to the company's book value - for the purpose of the share swap.
However, the stock is trading considerably higher on the market, having closed at J$10.87 per share last Thursday before dipping to J$10.25 on Friday — but still well off its J$13 high within the past year.
CCFG's operations will be merged into JMMB, but the process will not begin until after the offer period has expired. Those who take up the offer will be paid on June 29.
"As soon as the transaction is settled, clients will receive timely communication regarding the changes that will result following the successful closure of the offer," said JMMB group CEO Keith Duncan in the release announcing the offer.
"The intention is to combine the best of CCFG and the best of JMMB to deliver to our combined client base wider choices in investment and banking products and services," he said.