The Group General Counsel of Republic Bank, Jacqueline Quamina, has again allayed fears and rumours of a possible downsizing of HFC staff after the finalization of the HFC takeover by Republic Bank.
At an event in Accra to engage the media on the Republic bank’s Mandatory Tender Offer (MTO), Jacqueline Quamina emphasized the bank’s commitment to grow HFC with no intentions to reduce the bank’s workforce.
“There will be no downsizing; none at all. We are here to grow HFC. We are not here to reduce it in any way at all”, she emphasized.
Typical of mergers and acquisitions, staff of smaller entities been “swallowed” are often burdened with possible layoffs in the long run, however, the Group Counsel has assured Ghanaians of no layoffs in the HFC takeover.
She explained that despite the stiff competition in the banking sector, the Republic Bank’s vast experience in various areas of banking and an expansion philosophy driven by strong local participation in all its overseas investments, would see HFC bank being a better bank.
“We are very experienced operators with 175 years experience in an environment that is very much like Ghana. That is what we want to bring here and introduce to HFC. We will be a good bank and become an even better bank and the performance will show”, added.
On the Republic Bank’s Mandatory Tender Offer to HFC Bank shareholders, Elkin Pianim of Serengeti Capital, financial advisors to Republic bank, said the Republic Bank’s offer of GHS 1.60 per share payable in cash was a compelling offer that gives HFC shareholders an opportunity to cash in on a previously negative performing stock.
“Share price offered by republic bank to HFC bank shareholders is a compelling offer. It gives shareholders an opportunity to cash in on a stock whose historical performance prior to the entry of republic bank has been negative”, Mr. Pianim said.
According to him, anyone who held HFC bank shares in the years before Republic Bank came in around December 2012 was losing money.
Elkin Pianim further explained that the motive in tendering the MTO is the bank's model to become the controlling shareholder with significant local shareholding of HFC bank.
On the rationale behind the offer price, he said the bank wanted to cross the 50 percent share mark comfortably, but remain below 75 percent shares.
"It also reflects our long term strategic commitment to Ghana,” he stressed.
Shareholders were advised to consider the GHS 1.60 offer since it represented about two times the book value of HFC bank, values HFC bank at about eight times the earnings per share of the bank and values HFC bank with a 60% premium over the market value of similar banks in Ghana (such as Cal bank)
Despite an expected improved performance of HFC bank in the future, Mr. Pianim advised that HFC shareholders were unlikely to have a similar opportunity to cash in for several years to come should they refuse the Mandatory Tender Offer which ends on May 7 2015.
With the acceptance of the offer, institutional investors with current investments in HFC bank stand to obtain returns of between 300% and 1600%; returns Mr. Pianim said were spectacular returns in any market.
In the midst of current uncertainties in the Ghanaian economy, shareholders were also advised to take advantage of the opportunity offered by Republic Bank since investors with significant holdings could divest part of their position to capture the returns and recoup the value of their investments to date while retaining some shares in expectation of future long-term appreciation.
Republic Bank has offered HFC Bank shareholders a mandatory GHS 1.60 per share payable in cash.
This offer represents a premium of 18% above the average price of HFC Bank shares for the year to date and 20% above the Friday March 20, 2015 closing price of GHS 1. 33.
The mandatory offer to shareholders of HFC bank closes on Thursday May 7, 2015; 30 working days from the submission by Republic Bank to HFC Bank of the Offer document on Tuesday 24 March, 2015.
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