The mandate it said would enhance its long-term objective of enhancing the growth of the bank as well as in the Ghanaian economy.
Republic Bank Limited has offered shareholders of HFC bank a share price of GH¢1.60 per share for their equities in the bank. The offer ends on May 7.
The offer represents a premium of 18 per cent above the average price of HFC Bank’s shares for the year to date.
Its price represented more than eight times of 2014 earnings of GH¢57.9 million which compared favourably to its publicly listed peers in the Ghanaian banking industry.
Republic Bank currently holds a 40 per cent stake in the Ghanaian bank.
Ms Jacqueline Quamina, Group General Counsel, Republic Bank speaking at a press briefing in Accra yesterday said “we are at a point where every individual shareholder would have to decide what to do with their shares. These opportunities come but once. It is up to the shareholders to decide whether they want to welcome Republic Bank to Ghana or the status quo remains.”
She said the successful completion of the mandatory takeover would put the bank in its ensued growth and make HFC Bank more robust to carry on with its activities.
“HFC Bank will remain largely a Ghanaian bank and what we can do is to make it stronger. We want to use the opportunity to contribute our quota to the growth of the Ghanaian banking industry,” she said
In line with its strategic plan, she said the bank would continue to work with the local board and bank management to ensure continuity and growth in the business and put the bank in position to undertake big ticket deals.
“We have no plans of downsizing the workforce of HFC Bank. We believe in the human resource of the bank,” she said.
She said, “We believe in local expertise and we are very committed to the region and our presence would be to help enhance HFC mortgage business, grow the credit card business as well as provide support for the small and medium scale enterprises in the energy sector.”
She said the bank subscribed to a philosophy of expansion through organic growth and acquisition.
Ms. Quamina said the bank consistently creates significant value to strategic investment partners, driven by a philosophy of maintaining strong local participation in their operations.
Mr. Elkin Pianim, Serengeti Capital, said Republic Bank’s model was to be the controlling shareholder with significant local shareholding.
He said the rationale for the GH¢1.60 offer price was to cross the 50 per cent mark comfortably and also underscored the long-term commitment of the bank to the market.
Mr. Pianim said the offer is compelling on historical, sector valuation basis and in comparison with other alternatives and added that it would take years of robust operating results to justify the GH¢1.60 offer price.
Republic Bank in 2012 purchased 8.79 per cent shares in HFC Bank Ghana when HFC floated over 112.4 million ordinary shares under a private placement.
The bank later increased its stake to 32.02 per cent after it bought 23.23 per cent additional shares from Aureos Africa Fund LLC.
In June 2013, Republic Bank further acquired more than 68.85 million ordinary shares at no par value in HFC Bank Ghana Limited from Aureos Africa Fund LLC.
It further acquired 7.98 per cent additional shares in 2013 from Union Bank of Nigeria, increasing its shareholding in the bank to the current 40 per cent.