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Skye Bank pays 20% of Mainstreet Bank’s bid price

By BusinessNews Staff on October 11, 2014

In line with the agreement for its acquisition of 100 per cent shares of Mainstreet Bank Limited, Skye Bank Plc has signed a Share Purchase Agreement (SPA) with the Asset Management Corporation of Nigeria (AMCON). The Agreement was signed at AMCON’s Lagos office on Wednesday.
Skye Bank’s executive management team led by its Group Managing Director/Chief Executive Officer, Mr. Timothy Oguntayo, signed on behalf of the bank, while AMCON was represented by its executive management.
It was also gathered that Skye Bank has paid the mandatory deposit of 20 per cent for the acquisition of Mainstreet Bank.
Although AMCON did not disclose details of the transaction, a reliable banking industry source who is privy to the deal, told THISDAY that the winning bid submitted by Skye Bank for the acquisition of the bank, which is wholly owned by AMCON was N120 billion.
The payment, which was made well ahead of the deadline, confirms Skye Bank’s commitment to seal the transaction.
The bank also confirmed its ability to meet the remaining financial commitment on the acquisition within the specified time frame.
AMCON had announced Skye Bank as the preferred bidder for the acquisition of all its interest in Mainstreet Bank, representing the entire capital of the bridge bank. Skye Bank emerged the preferred bidder after a rigorous bidding exercise that spanned five months, which over 20 bidders participated.
The acquisition of Mainstreet Bank is part of Skye Bank’s strategic plan for growth. Skye Bank had emerged from the merger and integration of five banks in 2006, following the first phase of the banking industry consolidation. The bank intends to leverage its wealth of experience from the successful integration of five banks to drive efficiency, increase market share and ultimately ramp up stakeholder value from the acquisition of Mainstreet Bank.
“The acquisition would avail the bank many benefits, including cost leadership, business optimisation, and greater ability to offer business convenience to its teeming retail and commercial customers, with a combined branch network of over 450, across all the states of the federation,” a statement from the bank explained.
Skye Bank, a leading tier 2 Bank in Nigeria, was among the eight banks recently designated as ‘Systemically Important Banks by the Central Bank of Nigeria.
AMCON had announced Cedar One Investment Partners Limited as the first reserve bidder and Fidelity Bank Plc as the second reserve bidder for the acquisition of the entire issued and fully paid up ordinary shares of Mainstreet Bank Limited. But the corporation pointed out that in the event that Skye Bank is unable to complete the transaction in line with the payment terms and other provisions of the SPA, “the SPA entered into with Skye Bank would be terminated and Cedar would become the preferred bidder. Further, in the event that Cedar is unable to complete the transaction in line with the payment terms and other provisions of the SPA, Fidelity Bank would become the preferred bidder.”

[This Day]

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