As the Republic Bank Trinidad and Tobago (Barbados) Ltd. nears the finalization of its acquisition of Cayman National Corporation Ltd., the local bank’s stock price has dipped from US$6.25 per share to US$4.
Cayman National’s stock was trading at US$3 last August, when Republic Bank unveiled plans to pay US$6.25 per share in an attempt to acquire majority ownership in the local bank and its affiliated entities.
After the announcement, the price steadily rose over the next several months, reaching a high of US$6.25 on Dec. 21. That price held until Jan. 10, when it fell back to US$4.
During shareholder meetings late last year, some people said they were selling their Cayman National stock because they were worried about what its price would be after the acquisition was finalized.
Cayman National CEO Stuart Dack said it would be speculative to draw any links between the drop in the stock price and the fact that the acquisition is nearly complete. The only definitive thing that can be said about the transaction is that someone wanted to sell their stock last week on the Cayman National Stock Exchange, and US$4 was the price they received.
Meanwhile, Republic Bank’s offer to purchase Cayman National shares at US$6.25 is still open until Feb. 1, as the banks wait on regulatory bodies to approve the acquisition. The Dubai Financial Services Authority – approval from this regulator is required because Cayman National has a branch there, Cayman National (Dubai) Ltd. – signed off the deal last month, but approvals are still required from the Central Bank of Barbados, the Central Bank of Trinidad and Tobago, the Cayman Islands Monetary Authority, the Cayman Islands government, and the Isle of Man Financial Services Authority.
So far, Republic Bank has received acceptances to buy 87.92 percent of the shares of the local bank.
Republic Bank is still only initially acquiring 74.99 percent of Cayman National, and will determine how much stock it buys from each shareholder in accordance with a formula contained in its offer circular. Based on that formula, Republic Bank will buy about 85 percent of the stock from each individual shareholder who accepted the offer – so if a Cayman National stockholder agreed to sell 1,000 shares, the Republic Bank will actually buy about 850 at this point.