Jun 2007 Financial News

DB&G acquires Scotia Investments

Jun 08, 2007

Dehring Bunting & Golding (DB&G) shareholders approved the proposed acquisition of Scotia Jamaica Investment Management Limited (SJIM) at the Extraordinary Annual General Meeting held at DB&G's Holborn Road headquarters on Wednesday.

This means that ScotiaGroup's holdings in DB&G increased from 68.54 per cent to 77.01 per cent. All the shares in SJIM will be transferred to DB&G in exchange for 113,936126 additional DB&G shares to BNSJ and/or nominee at an exchange price of J$24.11. The deal is valued at J$2.747 billion.

Anya Schnoor, DB&G chief executive officer designate told shareholders, "All of DB&G and SJIM's current and future clients can therefore rest assured that my goal is not only to maintain the high service standards of DB&G, but to build on them. During the next few weeks we will launch a new exciting product which showcases the benefits of this new association."

While the acquisition was passed without dissent, the amendment to increase the maximum number of DB&G directors from nine to twenty did not pass quietly. Minority shareholders made their voices heard. "The resolution does not mean we will be moving to 20 directors right away," said David Noel, Scotiabank corporate secretary. "Based on the growth of DB&G that we anticipate, having additional directors may be necessary. This number of directors is in line with corporate Jamaica." John Jackson, financial analyst and DB&G shareholder said, "Twenty directors sounds substantial. Make it a maximum of 15 and then increase the number as circumstances demand. I don't see that quantum of 20 needed. I would move for resolution to move the number down to 15."

"Supported!" shouted a number of shareholders.
Jackson continued, "Scotiabank doesn't have more than 16, so why does DB&G need more than that?" Shareholder Ralph Chen added, "I say 6-8 directors."

Noel noted, "I don't think directors will jump from 9 to 20 right away. Trust the directors' judgment not to arbitrarily move the number of directors. I ask you to trust directors." Mark Golding, outgoing DB&G corporate secretary added, "The maximum number of directors at the Bank of Nova Scotia and Scotia Group is 20. It is just an attempt for DB&G to be in line with the rest of the group." Bank of Nova Scotia Jamaica and its Canadian parent company, Bank of Nova Scotia acquired 68 per cent of DB&G in November 2006.

Another shareholder asked, "Isn't BNS a bigger organisation than DB&G?" In support, Jackson added, "One entity earning $3 billion in profits cannot have the same number of directors as one generating $1 billion. It is inconceivable that you need such a number of directors. Nothing is wrong with coming to your shareholders in 10 years' time and then increasing the number of directors based on profit growth." Jackson stated, "Let the shareholders participate in the management of the company."

DB&G chairman, Stephen Vasciannie replied, "If you have 20 directors, you have more flexibility in setting people on committees." Former DB&G chairman and outgoing chief executive officer, Peter Bunting said, "The issue of directors is not that significant. The directors would be mindful of the shareholders' sentiment expressed." Bunting added, "Whether the company earns $1 billion or $3 billion in profits, there is the same level of regulation by the Financial Services Commission, the Bank of Jamaica and the Jamaica Stock Exchange. In this era of enhanced corporate governance, more independent directors can't hurt."

The amendment was eventually put to a poll. Votes of 213,546,978 for the amendment to 10,814 against the amendment carried the motion.


Source:
Dennise Williams
The Jamaica Observer
Friday, June 08, 2007

http://www.jamaicaobserver.com/magazines/Business/html/20070607T210000-0500_124040_OBS_DB_G_ACQUIRES_SCOTIA_INVESTMENTS.asp