Deal: Standard Bank pays N61b to Mahtani Brothers for additional stake in Stanbic IBTC

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Stanbic IBTC
Stanbic IBTC

Standard Bank Group the parent company of Stanbic IBTC has announced a further acquisition of 1,141,191,943 of its Nigerian Subsidiary.

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This represents an 11.35% jump in the bank’s equity taking its ownership stake in the bank to 64.4%.from 53.09%. Stanbic held about 53.02% at the end of 2016.

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Meanwhile, First Century Limited, the second largest single shareholder of the company owned 7.61% of the company. Being an off-market transaction, it is likely that there was a shareholder(s) who may have sold to Standard Bank.

Scoop

  • Stanbic did not name who sold its stake in the transaction. However, considering the size of the transaction we have reasons to believe that it could be First Century Limited selling off their stake in the bank.
  • The offer price was not officially disclosed but we understand it was around N53.75 generating a massive purchase consideration of about N61.3 billion.
  • Rencap is thought to have handled the sell side transaction of the deal.

Read also: Stanbic IBTC appoints Adekunle Adedeji to its board(Opens in a new browser tab)

Business day

Who is behind First Century

  • First Century International is owned by the Mahtani brothers. They also own Churchgate Nigeria Limited.
  • It is also likely that they owned the balance 3.7% via another entity which they need not disclose because it is not up to the mandatory 5% required for public disclosure.
  • Recall the Mahtani brothers were thought to be the minority shareholders at the centre of the Financial reporting investigation against Stanbic in 2015.
  • The brothers are currently in a heated court battle with Union Bank over a $68 million allegedly borrowed and to be used to finance the so-called Nigeria’s First World Trade Centre.
  • Mr. Bhagwan Mahtani served as Non-Executive Director of IBTC Chartered Bank PLC. from 2005 to 2010. His brother Mr. Ratan remained as a director of the bank.

Stanbic Share price

  • Stanbic IBTC share price has gained about 81% in the last one year and has been one of the best performing banking stock.
  • It hit a year high of N50 in March 2017 coming on the back of a multi-period low of about N14 a year earlier.
  • Stanbic IBTC share price closed at N46.1 on Thursday.

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