Apr 2007 Financial News

RBTT mulls 'combination/partnership' venture

Apr 18, 2007

THE RBTT Financial Group last Friday confirmed that it received a proposal from a third party with "respect to a possible combination/partnership".

The statement which was issued first to its staff said: "This proposal is under consideration and RBTT can confirm that its Board of directors has made no decision to recommend it to shareholders.

"Furthermore, there can be no assurance that a transaction will result from this or any proposal... RBTT continually investigates any and all opportunities that could enhance shareholder value," adding that it takes into account the best interests of its principal stakeholders, including its shareholders, employees and customers.

Prior to last week's statement, RBTT's chairman, Peter July, maintained that his Group has not agreed to the sale of the bank or to a merger with any third party, noting however, that RBTT continues to have discussions of a strategic nature regarding its portfolio.

"Discussions of this nature have been ongoing for at least the past two years and continue," he stated.

But with Friday's confirmation of a proposal, staffers told Business Express that they remain uneasy.

Canadian and local media reports about talks of a merger or acquisition between local financial giant, RBTT and First Caribbean International Bank (FCIB, a subsidiary of Canadian bank, CIBC), have left them both frantic and angry that they've never been "freely allowed to have union representation".

The workers furiously contended last week, that if this alleged deal goes through, their future is unsure.

President general of the Banking, Insurance and General Workers Union (BIGWU), Vincent Cabrera, not ruling out that an agreement could be reached between the two banks, told Business Express: "Any takeover or merger could inevitably result in retrenchment and the union could only handle matters for financial members. The society needs to decide whether foreign ownership of local banks is desirable, bearing in mind the strategic importance of the financial services sector."

One staffer said:"Hinging on this alleged offer that RBTT shareholders could receive $14 per share and two FCIB shares, that to me is a rip-off and should not be accepted. RBTT was going in the region of $45 per share just a couple years ago and from what is circulating, its current value remains in that area, $14 cash in hand is unacceptable," he said.

Financial analysts too, last week weighed in that in light of mounting speculation, the Securities and Exchange Commission, Minister in the Ministry of Finance, Conrad Enill given taxpayers 20 per cent RBTT stake via the National Insurance Board and the Central Bank should say something of worth, given that the largest paid-up capital on the market right now is RBTT.

"You have RBTT's managing director Catherine Kumar talking of investing US$50 million, talking about a recast programme and so on. "That US$50 million is existing shareholders' money. I can't see how they can be entertaining discussions to merge or sell, this same aggressive RBTT.

"The state is boasting of its thrust to make Trinidad and Tobago the financial centre of the Caribbean, yet stories of alleged talks behind the scenes, which could result in the merger or sale of our largest financial institution, taking account of its asset base - to an entity headquartered outside of Trinidad and Tobago, to me that is real capital flight," the analyst said.

Roxanne Stapleton
Trinidad Express - Business Magazine
Wednesday April 18, 2007
http://www.trinidadexpress.com/index.pl/article_business_mag?id=161130656