Bank PHB on Monday opened a N21bn mandatory bid for over three billion units of the issued shares of Spring Bank Plc at N7.00 per share in a bid to complete its acquisition of majority shares of the bank.

Francis Atuche, MD BankPHB

A statement by Bank PHB on Monday said the bid price was at a 25 per cent premium on the current market price of N5.59 of Spring Bank on the Nigerian Stock Exchange.

Spring Bank’s share price, which has been on partial technical suspension, has been insulated totally from the bearish trend that has seen most banking stocks lose up to 50 per cent of their value this year, according to the statement.

Under the partial suspension rules of the NSE, there may be trading on Spring Bank’s shares but there cannot be price movement.

In line with this, the statement said the bid price was considered attractive as most financial analysts believed the bank’s share price would have been significantly lower but for the freeze on its price movement on the Exchange.

Investors had already taken heavy positions in Spring Bank shares in recent weeks in anticipation of the bid.

Bank PHB stated that the tender offer was being made under “SEC’s Rule 131 Mandatory Bid Rule.”

“The Mandatory Bid Rule requires that any shareholder who acquires shares not less than 30 per cent or more of the voting rights of a company also extends an offer for the remaining shares at a fair price. The tender offer opened on November 28 and closes on December 18, 2008 at 4.00 pm, according to the bid document,” it added.

It said shareholders of Spring Bank can offer their shares by obtaining and completing “forms of acceptance,” which have been published in some newspapers and are also available through stockbrokers.

According to the statement, the bid is expected to take Bank PHB’s stake in Spring Bank Plc above 51 per cent, which will give it controlling stake in Spring Bank.

The bid document, it said, also showed that Bank PHB had already acquired and owned 33 per cent of the issued shares of Spring Bank, which was acquired in two tranches of 29 per cent in August, and an additional four per cent in September, with the consent of the regulatory authorities

At an extra-ordinary general meeting in November 2008, Bank PHB’s shareholders endorsed the bank’s bid to acquire outstanding shares of Spring Bank.

The bank’s shareholders had also voted to authorise the board of Bank PHB to make a strategic move to acquire majority shares in Spring Bank.

The bank is currently under a Central Bank of Nigeria-appointed management, following the board crisis that rocked it in 2007 after the banking sector consolidation.

“Bank PHB’s 2008 full year results shows that the bank now has total asset and contingents in excess of N1.15tn, total deposits of N718bn, and a tier 1 capital in excess of N250bn, ranking among the top three in the Nigerian banking industry,” the statement said.