The Republic Bank Trinidad and Tobago (Barbados) Ltd. has acquired majority ownership in local bank Cayman National Corporation Ltd.

According to an announcement on the Cayman Islands Stock Exchange, the Republic Bank has bought 54.15 percent of Cayman National stock at US$6.25 per share – a US$3.25 premium of what the stock was trading at before the offer was announced in early August – which is a roughly US$143 million transaction. Republic Bank said that it is still committed to purchasing up to 74.99 percent of the stock, and that its offer to shareholders is open through Monday.

However, the finalization of the acquisition is still subject to government and regulatory approvals, as well as another amendment to Cayman National’s articles of association to allow a single entity to own more than 10 percent of the bank.

While a vote was held at a shareholders meeting last week to remove a provision that prevents more than 10 percent of shares being issued to any entity, there is another restriction in the articles stating that the bank’s directors shall decline to register any transfer of shares that result in an entity owning more than 10 percent of Cayman National.

That restriction also needs to be removed, but was not voted on last Tuesday “as a result of an administrative oversight,” according to a notice on the Cayman Islands Stock Exchange.

“We apologize for any convenience,” Cayman National stated in its notice, setting a date of Nov. 7 for the next meeting.

The Compass attempted to contact Cayman National CEO Stuart Dack by phone and email to inquire whether the additional amendment would delay or otherwise affect the sale but did not hear back from him by press time.

Despite shareholders voting overwhelmingly to amend Cayman National’s articles of association at Tuesday’s meeting, several people spoke out against selling the bank to a foreign entity.

“They want this company for a reason. It’s probably because of their image,” businessman A.L. Thompson said at the meeting, speaking of Republic Bank and Trinidad. “But I don’t trust them, I don’t know who they are, and I don’t trust the whole country.”

Cayman National’s Mr. Dack explained at the meeting that Republic Bank has committed to largely maintain Cayman National as it is.

“All indications from Republic is that they very much want to leave things as they are at the moment. Cayman National is a very profitable business,” he said at an Oct. 9 meeting. “That’s why they want to leave staff as it is, that’s why they remain on all three islands, and leave the board majority Caymanian. They want to leave the culture of the business intact and to continue to do well, so they can get a return on their investment. That’s really their strategy.”

Republic Bank has indeed committed to maintaining Cayman National in its current form, subject to certain caveats. For instance, Republic Bank has committed to not institute systematic layoffs or redundancy for at least five years, “unless there is a significant adverse economic change or compelling business reason to do so,” according to a Cayman National circular explaining the offer.

Acquiring majority ownership gives Republic Bank other powers, including the ability to pass ordinary and special resolutions at Cayman National meetings, which allows it to amend the bank’s articles of association.

Additionally, Republic Bank will have the ability to control the composition of the board of directors, subject to the condition that the majority of the board remains Caymanian. Republic Bank intends to appoint its managing director, Nigel Baptiste, and executive director Roopnarine Oumade Singh to the board, according to the circular.

The Republic Bank may also have the power to acquire minority shares if it buys more than two-thirds of Cayman National.

“If the [Republic Bank] acquires more than two-thirds of Cayman National Shares as a result of the Partial Offer, the [Republic Bank] will have the ability to pass a special resolution approving a statutory merger which may result in the compulsory acquisition of Shares held by minority shareholders, subject to certain conditions,” the circular states, warning, “In that situation, dissenting Shareholders would be entitled only to payment of the fair value of their Shares, which, at such time, may be higher or lower than the offer price of US$6.25 per Share.”

Republic Bank Trinidad and Tobago (Barbados) Ltd. was incorporated in Barbados in 1999, and is a part of the Trinidad-based Republic Financial Holdings Ltd., which was originally called Colonial Bank when it was formed in 1837, according to the organization’s website.

Republic Financial Holdings Ltd. has more than $10 billion in assets, owns banks in Guyana, Grenada, Suriname, St. Lucia, and Ghana – as well as having a class B bank in Cayman, Republic Bank (Cayman) Limited – and has more than 4,000 employees in Trinidad alone, its website states.

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