Acquisition: Court approves Access Bank’s share allotment to Diamond Bank’s shareholders

As part of the ruling on the joint petition by Access and Diamond banks towards their planned merger, the Federal High Court in Lagos approved the transfer of all assets, liabilities and undertakings by Diamond Bank to Access Bank.

In a judgment delivered by Justice O.O. Oguntoyinbo on Monday, the court said Access Bank was authorised to issue and allot to all Diamond Bank shareholders two fully paid ordinary shares of 50 kobo each.

The issue and allotment, the court said, will be in exchange for every seven ordinary shares of equivalent value held by all Diamond bank shareholders.

Justice Oguntoyinbo said the cash consideration of N1.00 for every Diamond Bank share be paid by Access Bank within ten business days of the sanctioning of the Scheme of Merger by the court, while the entire issued share capital of Diamond Bank is cancelled.

The court said all legal proceedings, claims and litigation matters by Diamond Bank pending in court by or against Diamond Bank will be continued by Access Bank, while Diamond Bank will be dissolved without being wound up.

The petition followed reports of the separate court-ordered meetings of the ordinary shareholders of the two banks and written addresses of their legal counsel filed at the Federal High Court Registry, Ikoyi on Monday.

Also, counsel to the two banks had informed the court that both parties had agreed on the outcome of their court-ordered meeting affirming their resolution to merge.

Following the review of the various submissions, the court said it sanctioned them as binding on both parties, particularly the respective holders of their fully-paid ordinary shares.

Consequently, in line with the merger plan, the management of Diamond Bank on Wednesday announced full suspension on trading in its shares on the floor of the Nigerian Stock market.

In an application filed with the NSE by the bank’s Company Secretary/Legal Adviser, Uzoma Uja, Diamond said the announcement followed its receipt of the final approval of the Central Bank of Nigeria and the Securities & Exchange Commission to its proposed merger with Access Bank.

“Following the approval of shareholders that was obtained at the respective Court-Ordered Meetings held on March 5, 2019 – Diamond Bank Plc hereby confirms that shares of the Bank were placed on Full Suspension today, March 20, 2019,” the statement said.

Ms Uja said the full suspension will enable the Diamond Bank determine the shareholders that will be entitled to receive the consideration for the merger scheme.

As a result of the announcement, shareholders and other investors were informed not to expect any further trades in the shares of Diamond Bank Plc in the stock market after March 19, 2019.

On March 15, Access Bank, in a corporate filing with the NSE, announced it received the final approval of both the CBN and the SEC to the proposed Scheme of Merger with Diamond Bank.

The merger of the two banks is touted to be one that will produce Nigeria’s biggest bank in terms of both capital base and network among all the 23 commercial banks currently in operation in the country.