Cayman National Corporation acquisition: Board recommends sale to Trinidad bank

The board of directors for local bank Cayman National Corporation Ltd. announced on Tuesday that it is recommending their shareholders to accept an offer by the Republic Bank Trinidad and Tobago (Barbados) Ltd. to buy their shares.

“The Board believes that the Partial Offer is a good opportunity for Cayman National shareholders to realise the value of their investment in Cayman National,” the board stated in its announcement.

The board of directors stated that in making the decision, it carefully considered the price per share Republic National is offering investors (US$6.25 per share), the positive commitments Republic Bank made to the community, and the fact that Cayman National has the potential to benefit by being a part of a larger group of companies.

The board stated that it will publish a directors’ circular on or before Friday. The circular will contain more information about Republic National, the terms of the offer, and the board’s recommendation.

The US$6.25 offer by Republic Bank represents a $0.75 premium over the stock’s listed price, which was US$5.50 as of Tuesday. The price has steadily inched upward since the potential offer was announced in early August, from US$3 at that time to US$4.90 last month to the current price of US$5.50.

Republic National is aiming to purchase between 51 percent and 74.99 percent of Cayman National.

Cayman National’s notices about the sale state that it is subject to certain conditions, including Republic Bank maintaining a presence in the Sister Islands, retaining the name and branding of Cayman National and its subsidiaries, and keeping the “majority” of Cayman National’s workforce and management team.

The offer is also subject to conditions, such as Republic Bank acquiring at least 51 percent of Cayman National’s stock, government and regulatory approvals, and approvals by Cayman National shareholders to amend the local bank’s articles of association in order to approve the acquisition.

Cayman National President Stuart Dack said there is currently a restriction on anyone owning more than 10 percent of the bank’s shares, and that the restriction would have to be removed for the transaction to be finalized.

The Cayman National board is scheduled to hold an extraordinary general meeting for shareholders on Tuesday to vote on an amendment of the articles of association to remove that restriction.

The Republic Bank Trinidad and Tobago (Barbados) Ltd. is a wholly owned subsidiary of Republic Financial Holdings Ltd., which also owns banks in Guyana, Grenada, Suriname and Ghana, according to its website.

The institution’s website says that it was originally called Colonial Bank when it was formed in 1837. Colonial Bank was Trinidad and Tobago’s first commercial bank, the website states, adding that Republic Bank has more than 4,000 employees in Trinidad alone.