May 24, 2012
Today, JMMB submitted a formal Offer via an Offer Circular to the Capital & Credit Financial Group (CCFG) Board of Directors, signaling another critical step towards its acquisition of the Company. The Offer opens to the CCFG shareholders in Jamaica and Trinidad and Tobago on Friday, May 25, 2012 and will close on Friday, June 15, 2012.
Having received the formal Offer today, the Special Sub-Committee of Independent Directors of CCFG will consider the fairness of the Offer and with the support of independent expertise, the Board will make a recommendation to the shareholders via a Directors’ Circular within 7 days. In the meantime, while the Offer Circular will be distributed to the CCFG shareholders in Jamaica and Trinidad and Tobago via mail, the shareholders can visit JMMB’s website at www.jmmb.com/acquisition to download the complete document and forms.
JMMB Securities Limited (JMMBSL) is the Lead Broker on the Offer, while Capital and Credit Securities Limited (CCSL) is the additional Broker. As such, CCFG shareholders are invited to visit any JMMB or CCSL Branch in Jamaica or KPMG Regulatory & Compliance Services in Trinidad and Tobago for more information, as well as to submit the completed ‘Acceptance and Transfer Forms’ to fomally indicate their acceptance of the Offer.
Last August, JMMB made an offer to acquire 100% of the issued share capital of CCFG at a price of J$4.55 per share, of which 70% is to be paid in cash, which amounts to a total payout of J$2.95 billion. The remaining 30% is in a Share Swap, paid for in the form of new JMMB shares being issued to CCFG shareholders.
To date, holders of CCFG shares who together account for over 81% of the issued ordinary share capital of the Company, have given undertakings to accept this Offer. Once the desired take-up is achieved and the Offer closes, payment is expected to be made within two weeks thereafter, which is expected to be June 29, 2012.
In commenting on the transaction, JMMB’s Group Chief Financial Officer, Patrick Ellis, notes that, “It’s a win-win for all, including the CCFG shareholders, as they get an immediate upside in two ways. Between January to July 2011, prior to JMMB signalling its intention to make an Offer last August, CCFG’s average share price was $3.40. So at an Offer Price of $4.55 that’s 34% higher. The second benefit comes from 30% of the Offer Price in the form of JMMB shares, which provides the CCFG shareholders with an immediate 32%-40% increase in Share Value, as each JMMB share in the Swap Calculation is ascribed a price of J$7.54, being JMMB’s Book Value as at June 30, 2011.” Ellis adds, “JMMB’s shares currently trade at approximately TT$0.73 [equivalent J$9.94] on the Trinidad and Tobago Stock Exchange and J$10.52 on the Jamaica Stock Exchange (May 21, 2012).”
Should the JMMB Offer be accepted by holders of CCFG shares, the expanded entity will play a positive role in the development of the financial markets in Jamaica and the wider Caribbean and JMMB Group CEO, Keith Duncan, is optimistic that the balance of CCFG shareholders will see the value of the Offer.
“CCFG shareholders will enjoy tremendous benefits as a result of this transaction. It will give the expanded entity the opportunity to deliver stronger financial performance, increase efficiencies by extracting synergies in products, technology platforms and operations, thereby increasing the overall growth prospects and shareholder value.”
He was also quick to assure clients that no change will occur in how or where clients conduct business during the Offer Period. “During the formal Offer Period, and until the transaction settles, JMMB and CCFG will continue to operate as separate entities. As such, there will be no immediate change in where or how existing clients conduct business with JMMB and CCFG.” Duncan continues, “As soon as the transaction is settled, clients will receive timely communication regarding the changes that will result following the successful closure of the Offer. The intention is to combine the best of CCFG and the best of JMMB to deliver to our combined client base wider choices in investment and banking products and services, with greater levels of convenience and personalized attention to better enable them to achieve their financial goals.”