May 17, (THEWILL) – Nigeria’s second-oldest bank, Union Bank of Nigeria Plc, is to delist from the Nigerian Exchange by the end of June, 2023 after it was listed in 1971.
Titan Trust Bank Limited, the core investor that rescued Union Bank in June 2022, has offered to pay minority shareholders the sum of N7 per share in a buyout scheme for delisting from the Nigerian Exchange by the end of June.
To this end, Union Bank shareholders are expected to meet in Lagos on June 13, 2023, after an order of the Federal High Court Lagos directed that a meeting of shareholders be convened “to consider and if thought fit, approving (with or without modification) a Scheme of Arrangement between Union Bank of Nigeria Plc and the holders of its fully paid ordinary shares.”
In a filing to the Nigerian Exchange (NGX) on Tuesday quoting SUIT NO. FHC/L/CS/840/2023, Union Bank stated, among other things, that “the Bank’s shares shall be de-listed from NGX”, and “all the shares of the Bank that were lodged with the CSCS shall be transferred to Titan Trust” after the shareholders endorse the Scheme of Arrangement at the planned meeting.
The corporate communication dated May 16, and jointly signed by the Company Secretary, Union Bank of Nigeria Plc, Somuyiwa Sonubi, and Partner, Abubakar G. Anafi of G. Elias, further stated that:
“The holders of the Scheme Shares be paid the scheme consideration by Titan Trust Bank Limited for the transfer of the said scheme shares. That as consideration for the transfer of the scheme shares, each holder of the shares shall receive N7.00 (Seven Naira) per share transferred.
“That the NGX and the Central Securities Clearing System Plc (CSCS) shall be notified and requested to terminate trading in the shares with effect from the Eligibility Date and no trading or transfer of the Bank’s shares shall be registered after that date.”
According to the notice, the bank shall seek a resolution to authorize the Board of Directors to “take all necessary steps and to consent to any modifications of the scheme of arrangement that the Federal High Court or the Central Bank of Nigeria (CBN) or the Securities and Exchange Commission (SEC) may deem fit to impose or approve, or that may otherwise be required.”
By the Order of the Court, the Chairman of the Board of Directors, Farouk Mohammed Gumel, has been appointed to preside over the meeting, or in his absence “any other director appointed in his stead by the shareholders present at the meeting to act as Chairman of the said meeting” in which the presiding chairman is required to report the results thereof to the Court.
The statement noted that voting at the meeting will be by poll and that shareholders may vote in person, or appoint another person, whether a shareholder or not to attend and vote in their stead.
In compliance with NGX requirements, Titan Trust Bank Limited, the majority shareholder in Union Bank, will not be voting at the Court-Ordered Meeting and has informed Union Bank that it, its nominees, associates, related parties, or other party acting in concert, will not exercise its voting right at the meeting.
The current share price of Union Bank Nigeria (UBN) is NGN 7.00. UBN closed its last trading day (Tuesday, May 16, 2023) at 7.00 NGN per share on the Nigerian Exchange (NGX). Union began the year with a share price of 6.40 NGN and has since gained 9.38% on that price valuation, ranking it 58th on the NGX in terms of year-to-date performance.
Union Bank Nigeria is the 62nd most traded stock on the Nigerian Stock Exchange over the past three months (Feb 10 – May 16, 2023).
UBN has traded a total volume of 34.3 million shares—in 977 deals—valued at NGN 239 million over the period, with an average of 544,441 traded shares per session. A volume high of 13.9 million was achieved on May 9th, and a low of 9,702 on April 28th, for the same period.
TitanTrust Bank Limited brought to closure the deal enabling it to purchase a controlling stake in Nigeria’s second-oldest lender in June 2022.
The lender, backed by a former Central Bank of Nigeria deputy governor, Tunde Lemo, set out to acquire 89.4 per cent interest in Union Bank from a pool of stakes from then exiting major investors, including British Virgin Islands-based Atlas Mara and Union Global Partners Limited, but later upped the stake to 93.4 per cent.
The delisting of Union Bank from the Nigerian Exchange is coming 52 years after the 106-year-old financial services institution was quoted on the Nigerian bourse in 1971. Union Bank was founded in 1917 as Colonial Bank before changing its name to Barclays Bank in 1925.
The current market capitalisation of Union Bank is N203.85 billion with total of 29.12 billion shares outstanding.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
