‘Why Heritage Bank won bid to buy Enterprise Bank’

APART from being the preferred bidder for the acquisition of Enterprise Bank, more facts have emerged as to why Heritage Bank Limited got upper hand in the bid processes.

 

Sources close to the bank disclosed that the promoters of Heritage Bank were not only rich and influential, but they were also prepared to make funds available to ensure that funding, which caused revocation of operating license of defunct Societe Generale Bank, would no longer be a problem in the new dispensation.

A clear testimony to this, a reliable source said, was that Heritage Bank refunded 100 per cent of customers’ deposits trapped in the defunct Societie Generale Bank of Nigeria (SGBN), with interest for 10 years, even when the cash was not used for any income generating venture.

SGBN licence was withdrawn following its inability to meet the N25 billion minimum capital requirements during the banking sector consolidation. But in April 2008, a Federal High Court, Abuja, had granted its request to restore its licence.

Having paid the initial 20 per cent of the bid price last week, in line with the terms for its acquisition of Enterprise Bank Limited, Heritage Bank Limited is set to pay the balance of 80 per cent or N44.8 billion out of N56 billion bid price by October 13, 2014.

This is to pave way for the bank to purchase Enterprise Bank according to the Share Purchase Agreement (SPA) signed between the Asset Management Corporation of Nigeria (AMCON) and Heritage Bank Limited at AMCON’s head office in Lagos.

Another reason why the pendulum in the bid process weighed heavily in favour of Heritage Bank, a source further disclosed, was that it is not long the bank met all the standards of the current banking system in the estimation of CBN to return to operation.

This according to the source, gave it good experience and an edge over others in terms of meeting the regulators’ conditions.

CBN had reviewed the bank’s business plans and provided the necessary support based on Heritage Bank’s meeting of some minimum conditions before returning to business.

The source revealed that the Heritage Bank team was led to the SPA signing ceremony by the chairman of the bank, Mr. Akinsola Akinfemiwa. Other members of the Heritage Bank team that attended the ceremony, according to the source were the bank’s chief Executive officer, Mr. Ifie Sekibo, its Executive Director, Ivory Bank, Mr. Mary Akpobome and some other executive directors.

Also, representatives from the Financial Advisers to the deal -Citigroup Global Markets Limited and Vetiva Capital Management Limited as well as G. Elias & Co, the Legal Adviser were present.

“The papers were signed today, which signals the acquisition process. I can also confirm to you that a team to implement the transaction has been constituted,” the source revealed.

AMCON has requested that the transition from Enterprise Bank to Heritage Bank should be done 15 days after the remaining 80 per cent has been paid.

Heritage Bank commenced operations in March 2013. The deposit money bank was formed from the defunct Societe Generale Bank of Nigeria (SGBN) and was granted a regional banking licence by the Central Bank of Nigeria (CBN).

On commencement of business, its shareholding structure was 80 per cent core investor, nine per cent legacy bank, and 11 per cent of depositors’ funds.