OWN CORRESPONDENT, Johannesburg | Friday 9.00am.
STANDARD Bank Investment Corporation (Stanbic) remained defiant to a hostile takeover bid by Nedcor on Thursday, while revealing that Nedcor offered a far better deal to the bank in September last year.
Stanbic CE Jacko Maree said on Thursday Nedcor suggested a swap ratio of 4,35 Stanbic shares for one Nedcor share last year, in its bid to acquire Liberty’s 40% stake in Stanbic. This is far stronger than its current offer of one Nedcor share for every 5,5 Stanbic shares.
Nedcor CE Richard Laubscher on Thursday night confirmed the offer had been made, but said conditions were now different, the Business Day reports.
“We do not need a merger with Nedcor. There is a very real risk that more value may be destroyed than will be created,” said Stanbic chairman Conrad Strauss said at Thursday’s presentation.
“Stanbic shareholders will hold less that 50% of the merged entity although Stanbic contributes 14% more in earnings and 33% more capital,” he said.
“The Stanbic Board is of the unanimous belief that the current terms indicated by Nedcor are unacceptable and the Board’s recommendation is that shareholders should take no precipitous action.”
Nedcor said shareholders with about 40% of Stanbic shares have already signed irrevocable letters of support for a merger.
Stanbic has cast doubt on Nedcor’s calculations saying there are few international precendents for a successful merger of this nature.
It said Nedcor has given limited or no attention to the businesses that generate 55% of Stanbic’s earnings.
It has also questioned Nedcor’s estimate of 30% return on equity. It said recent surveys indicate that the largest domestic banks are rarely the most profitable.
Ranked 155 in the world by total assets, the merged bank will still be very small by international standards, Stanbic said.
Other reasons it listed are: prospects for the merged entity will be significantly impaired due to the combined market share of Stanbic and Nedcor; the lack of experience in both banks in implementing a successful merger and the increased domestic concentration in revenue generating areas.