On Friday FCMB and FinBank finally agreed to a merger following the overwhelming support of the shareholders (97%).
However, aggrieved staff of Finbank as well as some minority shareholders of which I am a very tiny part of see this deal as a rip off! This is because in the deal FCMB ( consider smaller in physical assets but not in value or cash) would exchange 1 of it’s shares for 60 in FinBank. Meaning 60 FinBank shares is only worth one of FCMB. In fact if you own 60,000 FinBank shares then in the new merged company your shares is now 1000 shares. Enough to make you cry right? Well only if you look at it critically you may be happy.
As at thursday FinBank shares was worth about 50kobo. So your 60,000 shares is only worth N30K. However by close of business Friday FCMB shares were worth about N4 per share. Therefore you have N4 times 1000 Which is N4000. The above is enough to enrage anyone if only this is where it stops.
FinBank is presently undercapitalised an is only surviving via life support from AMCON. They are basically on the verge of bankruptcy as they owe more than they own. So the N30k above may well be zero if the company liquidates and decides to sell of all it’s so called physical assets to repay it’s debt. I hear they owe AMCON about N4b and so part of the deal entails that FCMB pays FinBank N5b which will be used to pay debts including AMCON’s N4b.
So cheer up guys this may nit be a bad deal for us after all.