The Nigerian Stock Exchange (NSE) Wednesday placed a full trading suspension on the shares of Diamond Bank Plc following the Court sanction of the scheme of merger between the bank and Access Bank Plc.
In a notification to market operators, the NSE explained that the suspension was required to prevent trading in the shares of Diamond Bank in order to determine the bank’s shareholders who would qualify to receive the scheme consideration.
“The bank obtained the Court sanction of the Scheme on Tuesday, 19 March 2019, being the effective date of the scheme. The bank’s shareholders passed a resolution approving the merger between Diamond Bank and Access Bank Plc at the Court ordered meeting of the bank held on Wednesday, 6 March 2019. The Scheme will result in the delisting of Diamond Bank Plc from the Daily Official List of The Exchange,” the NSE explained.
Shareholders of the bank had approved the merger early this month.
Commenting on the votes by shareholders, Chief Executive Officer of Diamond Bank, Uzoma Dozie, said: “I am happy that the shareholders of Diamond Bank have supported this merger. The merger will bring together the complementary retail and corporate banking capabilities of two of Nigeria’s leading banks, creating Africa’s largest retail bank by customer base and Gateway to the World.”
The merger would involve Access Bank acquiring the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank. Based on the agreement reached by the boards of the two financial institutions, Diamond Bank shareholders will receive a consideration of N3.13 per share, comprising of N1.00 per share in cash and the allotment of two new Access Bank ordinary shares for every seven Diamond Bank ordinary shares held as at the Implementation Date.. Immediately following completion of the merger, Diamond Bank would be absorbed into Access Bank and it will cease to exist under Nigerian law. Also, the current listing of Diamond Bank’s shares on the NSE and the listing of Diamond Bank’s global depositary receipts on the London Stock Exchange will be cancelled, upon the merger becoming effective.
Meanwhile, trading at the stock market continued on bearish note for the third consecutive day. As a result, the NSE All-Share Index depreciated by 0.13 per cent to close at 31,040.84, while market capitalised shed N15.5 billion to be at N11.6 trillion.
Also, volume and value of trading fell 22 per cent and 30.1 per cent to 223.6 million shares and N2.2 billion respectively.