It was celebrations galore at Access Bank over the weekend as the Nigerian Tier 1 bank hosted its annual Xmas party for staff, business partners and friends of the bank. The annual event themed “Havana Nights” is one of the most sought-after corporate Xmas parties and lived up to its billing.
In attendance were the bank’s top echelon including the Managing Director of the bank Herbert Wigwe. As a plethora of top artists including the likes of Tiwa Savage, Burna Boy, Wizkid and Mayorkun wowed fans with their on-stage performances, negotiations for a merger between Access Bank and Diamond Bank reached closing stages. Top executives of both banks had just hammered out what sources termed the key commercial terms of a potential merger that could usher in one of the largest banks in sub-Saharan Africa.
The celebrations continued into Sunday as Access Bank hosted the Born in Africa Concert at Eko Atlantic City. Guests seated at the VVIP (Very very important personality) section of the packed event were seen clinking glasses as they cheered on to another blockbuster merger that is set to make Access Bank the largest bank in Nigeria by asset base. As the clock ticked towards midnight, local media had picked up the cheering news. Finally, Access Bank will be acquiring (or merging with) Diamond Bank.
Sprawling rumours now confirmed.
Rumours of a potential merger deal surfaced a few weeks back to the shock of the investing community. However, both banks issued statements denying that any merger talks were ongoing. Despite the denials, people familiar with the transaction inform Nairametrics that the deal was never off the table and had been going on for weeks. Both sides had already facilitated the presence of a due diligence team from one of the big three audit firms.
According to a source, a board meeting was held over the weekend approving the merger terms after weeks of negotiations surrounding several aspects of the transaction. Both banks are now expected to formally seek a shareholder agreement before applying for the approval of the CBN and Securities & Exchange Commission.
There is still a long way to go before this deal will be completed. Nairametrics believes the following set of activities will take place before Access Bank merges with Diamond Bank.
Formal Announcement – We expected a formal announcement to be made via the Nigerian Stock Exchange in the early morning of trading. Typically, deals like this are announced on the stock exchange before a board approval of announced. It appears negotiations had ensued without the knowledge of the stock exchange.
Shareholder Approval – Following the approval of the board of directors of both banks, an extraordinary general meeting of shareholders of the banks will be held respectively. At the meeting, shareholders of both banks will be expected to grant their consent.
Regulatory approval – The approval of the Central Bank of Nigeria will have to be obtained. Whilst we do not see any potential snag, the apex bank will still need to confirm if depositors funds are not in anyway in danger of being impacted by this transaction. The Security and Exchange Commission, SEC, will also be required to approve the transaction in line with its extant laws. SEC will review the impact on shareholders value before an approval is received.
Further negotiations continue – The banks will continue to negotiate other aspects of the deal such as the offer price, asset valuations, board memberships, employee to be sacked or retained etc.
As midnight approached, the party had just begun at the Access Bank sponsored Born in Africa concert. The night is bound to be a very long one as other major Nigerian artists such as Davido, Tiwa Savage etc. were yet to perform. Event attendees are in for a long and enjoyable night and have nothing to worry about except to savour the moment. Same can be said of Access Bank as they look forward to an eventful week of anouncement what is arguable the biggest merger in over a decade in Nigeria.