Dec 2006 Financial News

FirstCaribbean may snap up Guardian's holdings in RBTT

Dec 01, 2006

Guardian Holdings Limited (GHL), under pressure from the poor performance of its equity holdings, is looking to offload its shareholdings in RBTT Bank, and the likely buyer is FirstCaribbean International Bank (FCIB), Caribbean Business Report sources say.

"GHL is under pressure and might want to exit out of the commercial banking area. Plus, there is a cultural difference between the two companies. In Trinidad, RBTT is viewed as more aggressive than GHL. This is a hot topic of conversation in Trinidad & Tobago," our source says.

The source suggests that FCIB would be a likely buyer because, "The acquisition of RBTT would give FCIB a stronger toehold in Jamaica and Trinidad and Tobago."

FCIB officials could not be reached for comment.
Another source within RBTT stated, "I am not surprised at this news, it has been talked about for some time."

GHL owns 13.5 per cent of RBTT, which has a presence in Caribbean countries including Jamaica and Trinidad & Tobago as well as Aruba and the Netherlands Antilles. FCIB also has a presence in Jamaica, the wider Caribbean and the Netherlands Antilles.

A broker speaking anonymously stated, "Look at the movement of the RBTT share price over the last two weeks. It has moved considerably from where it was at the beginning of the month because insiders know something is happening."

On the Jamaica Stock Exchange (JSE), RBTT's share price moved by 18.9 per cent from $280 on November 27 to $333 on November 29th.

In terms of reasons to sell, our source stated, "GHL has been losing money since the start of the year. The company holds a lot of equities and they have had to write them down. Plus, the acquisitions that GHL made in England are not going well."

Indeed. According to the third quarter results to September 30, 2006, the company states, "The continuing poor performance of the regional stock market coupled with the soft market conditions and significant restructuring costs of the UK General Insurance subsidiaries are the two factors solely responsible for GHL reporting a loss of TT$707.4 million for the nine months ending September 30th."

The financial report goes on to say, "There is very little we can do directly as a group to improve the value of our investment holdings, particularly given our regulatory constraints and, in any case, we view these investments as strategic and, like most equity investments, long term."

However, our source insists that there is something that GHL can and will do. "GHL needs cash, so they are planning to sell the RBTT shares they hold."

RBTT corporate communication officials were unavailable for comment by press time.

Source:

Dennise Williams
The Jamaica Observer
Friday 1st December, 2006

http://www.jamaicaobserver.com/magazines/Business/html/20061130T200000-0500_116016_OBS_FIRSTCARIBBEAN_MAY_SNAP_UP_GUARDIAN_S_HOLDINGS_IN_RBTT.asp