Mar 2008 Financial News

D-Day for RBTT

Mar 26, 2008

RBTT has about 16,000 shareholders on record. Some 60 per cent of them usually respond when the bank has annual general meetings, but given the widespread commentary and discussion about the proposed sale of the bank to Royal Bank of Canada (RBC), RBTT Group CEO Suresh Sookoo expects a total response—via proxies and attendance—of roughly 80 per cent at this morning’s special general meeting to vote on the bank’s acquisition.

Only shareholders will be allowed into the meeting, which will be held from 9.30 am in the ballroom of the Hilton Trinidad and Conference Centre.

Unless they are shareholders, members of the media will not be allowed to attend.

Speaking yesterday, Sookoo said bank chairman Peter July will host the morning’s proceedings.

Sookoo said the bank’s managers and directors are hoping the meeting will be a success.

“It is a landmark transaction,” Sookoo said.

He said much of the commentary over the RBTT/RBC deal has dealt with nationalism and fairness over RBC’s share price offer.

The National Insurance Board is the largest single shareholder in RBTT, owning 69.3 million shares, representing 20.18 per cent of the bank’s issued share capital.

The second largest shareholder is Guardian Holdings Ltd with 14 per cent.

Businessman Richard Azar is a principal shareholder.

It is understood that Azar owns a little more than 3 per cent of the bank’s shares.

RBC announced last October its intent to acquire RBTT for TT$13.8 billion.

RBC, which operated in Port-of-Spain 20 years ago, has proposed to pay RBTT shareholders TT$40 or US$6.33 per RBTT share payable in 60 per cent cash and 40 per cent in RBC common shares.

This is the proposal shareholders will discuss and vote on this morning.

According to the RBTT Holdings Ltd directors’ circular, dated February 8, 2008:

“Approval of the RBTT amalgamation resolution requires the affirmative vote of not less than 75 per cent of the votes validly cast in person or by proxy at the RBTT meeting of shareholders voting together as a class.”

If shareholders do approve the resolution, the deal is expected to be completed by mid-2008.

Opinions on the transaction have differed dramatically.

Lai Fadahunsi, deputy managing director, AIC Securities Ltd, said RBC is a strong, solid company.

Fadahunsi said compared to other banks, RBTT had not fared as well, and that RBC’s TT$40 offer per share is a fair price.

RBTT Financial Holdings Ltd recorded pre-tax earnings of US$145 million for the nine-month period ended December 31, 2007.

For the six months ended September 2007, chairman July said the trust and asset management business continued to under-perform as the local stock market remained depressed and the investment banking business did not achieve set targets for the period.

While Fadahunsi is for the RBTT/RBC deal, Robert Mayers, CEO of CMMB Securities Ltd, is not.

Mayers has urged clients who are shareholders to reject the takeover bid.

“The offer is too low,” Mayers said, considering that RBC will be getting control of RBTT’s assets if the deal is approved. “If you are paying $40 you are not paying any premium for control.”

Against the realities of globalisation, Mayers has said he’s not against anyone taking over anything as long as the price is right.

Also against the sale, though for different reasons, is the Federation of Independent Trade Unions (Fitun).

So much so, that last week Thursday, Fitun protested outside RBTT’s head office on Park Street, Port-of-Spain.

President David Abdulah has called on shareholders to put country and region before self and vote against the sale.

Bourse Securities and stockbroker Ian Narine have advised RBTT shareholders to accept RBC’s offer.

Source:
SANDRA CHOUTHI
Trinidad Guardian, Page 21
Wednesday March 26, 2008

http://www.guardian.co.tt/business1.html