Heritage Bank, the preferred bidder for Enterprise Bank, is yet to pay the remaining eighty percent of its N56 billion acquisition of Enterprise Bank, BusinessDay learnt last night.
Under the terms of the acquisition, Heritage was meant to pay 20 of the purchase price after it was announced as the preferred bidder and then make the final payment by yesterday.
The financial markets waited anxiously for word yesterday on the transaction and frayed nerves were calmed only after word emerged that AMCON had chosen to further extend the payment deadline by two days.
BusinessDay gathered that Heritage Bank is now under pressure to raise fund to complete the payment before the new deadline.
The extension, according to Kayode Lambo, head, corporate communications strategy & research, AMCON, was as a result of the two-day holiday to mark the Muslim festival.
Analysts, however, divided on the rationale for the extension with some querying why the holiday should affect the payment that had been earlier agreed and signed, especially when it emerged that one of the bidders for Enterprise had offered as much as N70 billion without having a hearing.
The group which had as partner, ABRAAJ a top Private Equity firm with considerable appetite for Africa, offered to pay N58 billion for AMCON shares and also put up an extra N12 billion as fresh cash injection into Enterprise Bank.
A financial analyst who had followed the deal told BusinessDay last night, that controversy surrounding AMCON’s decision to pick Heritage as preferred bidder will come under further scrutiny following its surprise decision to further extend the payment deadline.
You would have thought that if for one reason or the other AMCON had issues with the highest bid, it will at least call for a negotiation. That it failed to do this leaves a sour taste in the mouth of many and this is sending the wrong signals to foreign investors watching the Nigerian space”, the analyst told our reporter.
Curiously, it was further gathered that weeks after AMCON made its announcement, it has yet to explain its decision or why it will not call up the highest bidder for a discussion.
Lambo confirmed to BusinessDay last night there was no truth in the rumour making the rounds that Heritage Bank had fully met the acquisition payment.
“It’s not true. They are supposed to pay today (Monday) but because of the two days holiday, it was extended to Wednesday,” he said on phone.
At Heritage Bank, a source confirmed to BusinessDay that the bank would definitely pay before the new deadline.
“Heritage Bank is making effort to pay. We are not going to default,” the source said on phone.
Heritage Bank had on September, made 20 percent initial payment of the about N56 billion bid for the acquisition of Enterprise Bank.
“In line with AMCON’s requirements for the acquisition of Enterprise Bank Limited, HBCL Investment Services Limited (HISL) which is the special purpose vehicle sponsored by Heritage Bank Limited to bid for Enterprise Bank had signed the Share Purchase Agreement (SPA).
“I am also aware that HISL has paid the initial 20 percent as specified in the terms of the agreement. Efforts are ongoing to ensure that the balance of 80 percent is also paid, in line with the terms, conditions and timeframe specified by AMCON,” Ifie Sekibo, group managing director/CEO, had said, following its announcement as preferred bidder.
“This major step towards the acquisition of Enterprise Bank by HISL and by extension, Heritage Bank, fills us with great excitement. With this takeover process going on smoothly, we are sure a more energised bank with improved capacity to create, preserve and transfer wealth will soon emerge,” said Sekibo.
Enterprise Bank commenced operation in August 2011 as a full-service commercial bank with a national banking licence. The bank operates via a sizeable distribution network of over 160 branches spread across major markets and commercial centres in Nigeria and with over 177 Automated Teller Machines, 57 cash centres and 2,000 Point-of-Sale terminals.
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