The Republic Bank Trinidad and Tobago (Barbados) Ltd. has hit the maximum threshold for the amount of Cayman National Corporation Ltd. stock it will buy.
According to an announcement on the Cayman Islands Stock Exchange, the Republic Bank received acceptances from shareholders to purchase 75.47 percent of Cayman National shares. Since the Trinidad-based bank was only offering to purchase between 51 percent and 74.99 percent of Cayman National, the Republic Bank’s purchases of shares will be determined in accordance with a formula laid out in its offer circular.
Acquiring majority ownership will give Republic Bank controlling powers over Cayman National, 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 now that it has received acceptances for more than two-thirds of Cayman National stock.
“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.”
The finalization of the sale is still subject to government and regulatory approvals, as well as an amendment to Cayman National’s articles of association to allow an entity to own more than 10 percent of the local bank.
A vote was held on Oct. 9 to remove a provision that prevents more than 10 percent of Cayman National shares being issued to any entity. That amendment passed with roughly 80 percent of the voting shares in favor of removing the restriction.
However, 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 at the Oct. 9 meeting due to “an administrative oversight,” according to a notice on the Cayman Islands Stock Exchange.
“We apologize for any inconvenience,” Cayman National stated in its notice, setting a date of Nov. 7 for the next meeting.