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Investors’sentiments diverge over Access, Diamond

By Nkiruka Nnorom

Investors swooped on the shares of Diamond Bank Plc following the announcement of its merger, Monday, with Access Bank Plc, resulting in 44.2 percent increase on the shares of the bank in four trading days.

Specifically, the bank’s shares galloped from N0.95, its opening price on Monday to N1.37 at the close of transactions yesterday, an indication that investors are favorably disposed to the deal.

Also, 74.58 million units of shares valued at N79.3 million were crossed by investors in the bank in 195 deals within the four day period.

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However, Access Bank fell by 0.7 percent with the shares declining to N7.40 from N7.45 on Monday, obviously on profit taking by investors.

On the bright side, investors exchanged 106.79 million units of the bank’s shares valued at N834.53 million in 1,006 deals.

Recall that both banks, including the Securities and Exchange Commission, SEC, and the Nigerian Stock Exchange, NSE, had confirmed the merger last Monday, sending the shares of both banks sky high.

According to the Memorandum of Agreement, MoA, signed by both banks, Access Bank would acquire the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares via a Scheme of Merger.

Consequently, shareholders of Diamond Bank would receive a consideration of N3.13 per share, comprising of N1.00 per share in cash and the allotment of two new Access Bank ordinary shares for every seven Diamond Bank ordinary shares previously held as at the implementation date.

The offer represents a premium of 260 percent to the closing market price of N0.87 per share of Diamond Bank on the NSE as at December 13, 2018, the date of the final binding offer.

The Managing Director/CEO of Access Bank, Herbert Wigwe, has also assured thatno toxic asset would be carried into the post merger entity, saying Diamond Bank will write off all its bad loans prior to the consummation of the merger.

Breakdown showed that the shares rose by 9.47 percent on Monday with the announcement to close at N1.04, while 70.98 million units of shares were exchanged by investors in 129 deals. The shares advanced on Tuesday to N1.14 after appreciating by 9.62 percent, while 2.24 million units valued at N2.55 million were traded by investors in 27 deals.

It went further up on Wednesday by 9.65 percent to N1.25. Also, 1.36 million shares worth N1.70 million were exchanged in the bank in 26 deals.

On Thursday, it again emerged one of the top gainers, rising by 9.60 percent to close at N1.37. Investors exchanged 888,234 shares valued at N1.22 million in 13 deals.

 


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