Apr 2012 Financial News

JMMB GETS NOD ON CCFG ACQUISITION: Will Seek Shareholder Approval to Complete Transaction

Apr 05, 2012

April 4, 2012

JMMB’s bid to acquire the Capital & Credit Financial Group (CCFG) has achieved a critical milestone. The Minister of Finance and Planning has granted approval for JMMB to proceed to make a formal offer to the shareholders of CCFG to acquire the shares of that entity and has indicated his intention to grant approval under section 21 of the Financial Institutions Act, subject to acceptance of the formal offer by CCFG shareholders JMMB’s satisfaction of certain pre-requisites.

This approval puts JMMB in a position to make a formal offer to the shareholders of CCFG in Jamaica and Trinidad and Tobago to acquire 100% of their shareholding, upon making the required submissions. On receiving notification of the formal offer from JMMB, the Board of CCFG will issue a Directors’ Circular providing its recommendation to the CCFG shareholders.

JMMB’s vision is to harness the strengths of both entities, CCFG and JMMB, to create an even more formidable financial services group that will offer a wider range of products and services through a wider branch network to a combined customer base of over 187,000 clients. The combined group will have Total Assets of $152.1 billion.

No Change in How or Where Clients Conduct Business during Offer Period
During the formal offer period, JMMB and CCFG will continue to operate as separate entities. As such, there will be no immediate change in where or how existing clients conduct business with JMMB and CCFG; they will continue to benefit from both organisations’ culture of excellence in client care. Clients will receive timely communication as soon as the offer closes, regarding the changes that will result following the successful closure of the offer. The combined group will provide clients with wider choices in investment and banking products and services with greater levels of convenience and personalized attention to better enable them to achieve their financial goals.

Closing the Transaction: JMMB’s Formal Offer to CCFG Shareholders
The offer price is J$4.55 per share. Of this 70% is to be paid in cash, which amounts to a total payout of J$2.95 billion. The remaining 30% is in a Share Swap, paid for in the form of new JMMB shares being issued to CCFG shareholders.

As indicated in August 2011, JMMB successfully initiated a process to secure formal undertakings of the major shareholders of CCFG to sell their shares to JMMB on the above terms once approval is given by the Minister and the formal offer to all shareholders in accordance with the JSE Rules, is made. To date, holders of CCFG shares who together account for over 81% of the issued ordinary share capital of the company, have given undertakings to accept this offer. Once the offer is successfully completed JMMB looks forward to welcoming all the CCFG shareholders.

Keith Duncan, CEO of the JMMB Group is pleased with the favourable response of the Minister of Finance and Planning. He stated, “This approval puts us in a position to seek to capitalize on the strengths of both JMMB and CCFG – two Jamaican companies which share a passion for Jamaica and its development, as well as a commitment to all Caribbean nationals realizing their dreams and financial goals.” Duncan continues, “I hope that the remaining CCFG shareholders also see the tremendous benefits of this transaction. It will give the expanded entity the opportunity to deliver stronger financial performance, increase efficiencies by extracting synergies in products, technology platforms and operations, thereby increasing the overall growth prospects and shareholder value.”

Ryland Campbell, Chairman, Group President & CEO of CCFG noted that “Over the past 18 years of its existence, Capital & Credit has remained steadfast in its commitment to provide value to the benefit of its many stakeholders: customers, employers, shareholders and the wider community. We are proud of our record of consistent profitability, year over year. However in keeping with that commitment to sustainable growth, we had long signaled our intention of establishing a strong corporate alliance aimed at facilitating the addition of more value for our stakeholders. When the offer from JMMB is received, a special sub-committee of independent directors of the CCFG Board will consider the fairness of it and with the support of independent expertise, the Board will make a recommendation to the shareholders.”

The Directors of both the JMMB Group and Capital & Credit Financial Group take note of the intention to combine these two successful Jamaican companies in Jamaica’s Independence Jubilee (50th) Anniversary year. Should the JMMB offer be accepted by holders of CCFG shares, the expanded entity will play a positive role in the development of the financial markets in Jamaica and the wider Caribbean.


Source:
Jamaica Money Market Brokers Limited website
Thursday April 5, 2012

http://www.jmmb.com/complete_article.php?id=144