NCB to make new offer for GHL

US$2.65 (TT$17.90) per share. This is the new offer NCB Global Holdings Ltd (NCBGH) is due to make to shareholders in its takeover bid of Guardian Holdings Ltd (GHL). And it has the blessing of the Securities Exchange Commission (SEC).

In a statement yesterday, the SEC said it had reached a settlement with the Jamaican conglomerate on the conditions of its bid to acquiring controlling interest of the local financial services group, which had been objected to by minority shareholders. Last December 8, NCBGH made an offer of US$2.35 (TT15.88) per share for up to 62 per cent of the shareholding of GHL, triggering the takeover code.

Minority shareholders, led by investor Peter Permell, had questioned the circumstances of the offer in relation to shares held by principal shareholders businessman Arthur Lok Jack (a former GHL chairman) and the Ahamad family (Imtiaz, Shiraz and Reyaz), owners of a leading car dealership Southern Sales & Service Co Ltd. Imtiaz is also a GHL director.

The SEC had convened a hearing in February which continued in March had been recently scheduled to resume on November 21, but its statement said a settlement had been reached centred on the new share offer which it recommended shareholders should consider.

The commission observed the public interest stood to be affected by protracted deliberations over the takeover bid.

"There was also significant concern that the on-going proceedings, while unresolved, would create uncertainty in the capital markets," the SEC said.

Without either NCBGH or the SEC admitting to either of its claims, the commission said the settlement on the conduct of the bid would preserve the public interest and maintain market stability.

The settlement provides that NCBGH can acquire up to 51.85 per cent of GHL shares, or more, but not less than 50.01 per cent.

The SEC has to review the final commercial terms and the timing of the offer before NCBGH can make its pitch to shareholders. The SEC said it expected the new offer to be issued shortly after it's review.

The commission said Permell is "persuaded" based on documentary and oral submissions made by the parties during the hearing that the agreement was in the best interest of GHL minority shareholders. "For NCBGH, it may pursue its takeover bid by which it will seek to acquire control of GHL."

GHL's share price rose to $18, an increase of $1.02, in trading on the stock exchange yesterday. In its third quarter results to September 30, issued this week, GHL's profit attributable to equity shareholders was an estimated $371 million, and increase of $117 million, or 46 per cent, over the same period last year. Overall, its profit before taxes was $487.1 million, up from $328.9 million, and earnings per share was $1.60 up from $1.10 in September 2017.