The Canadian Imperial Bank of Commerce (CIBC) says that over time, it will sell back to the public in the region, about seven per cent of its holding in FirstCaribbean International Bank, after its acquisition of Barclays’ 43.7 per cent stake in the region’s largest bank.
CIBC, which has a 43.7 per cent stake in FirstCaribbean, reportedly intended to buy Barclays’ stake, a move that would immediately raise the former’s stake to 87.4 per cent.
But yesterday, First-Caribbean (Jamaica), in response to questions by the Business Observer, said the intention was to eventually have “public minority ownership interest of up to 20 per cent.”
CIBC would therefore have to sell back over seven per cent of its shares in FirstCaribbean.
“CIBC welcomes and encourages minority shareholding in FirstCaribbean,” said the statement from FirstCaribbean in response to the Business Observer query. “It is hoped going forward that such minority shareholding will continue to exist and indeed grow. Over time, CIBC expects us to have a public minority ownership interest of up to 20 per cent, with listing and trading through major regional stock exchanges.”
CIBC and Barclays jointly announced on Monday, the non-binding letter of intent for CIBC to acquire Barclays’ 43.7 per cent stake in FCIB for about US$1.08 billion.
This would put CIBC’s stake to 87.4 per cent, with the remaining 12.6 per cent of FirstCaribbean publicly held.
The deal, by giving CIBC more than 50 per cent ownership in FirstCaribbean, which is listed on the Jamaica Stock Exchange, would trigger the JSE take-over rule, thus forcing CIBC to make an offer to minority shareholders in FirstCaribbean.
Yesterday, FirstCaribbean, in speaking on behalf of CIBC, indicated that the parent would comply with all regulatory requirements.
“Any mandatory offer obligations under local takeover code or other regulations will be complied with,” said the bank in response to the newspaper.
However, in its shareholder notification accompanying the financial quarter ended January 31,2006, FCIB said that it had appointed a special committee of the board, comprised of independent directors of FCIB, “to review potential implications of the transaction, if any, on the company’s minority shareholders.”
The Nassau Guardian
