Diamond Bank shares appreciate after acquisition

Diamond Bank shares have gained over nine percent in value days after news broke out that the tier 2 bank has completed arrangement to merge with Access Bank with its market capitalization risen by over N4bn to N26.4 billion as at the close of business on Tuesday.

Recall that the Board of Directors of Diamond Bank in a statement on Tuesday, explained, “Diamond Bank expects the transaction to complete in the first half of 2019.”

According to Diamond Bank, the proposed merger would involve Access Bank acquiring the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a Scheme of Merger.

On Monday, the bank gained 9kobo per share to close at N1.04 at the Nigerian Stock Exchange, less than 24 hours after the deal was announced.

The case was no different on Tuesday when the bank gained 10kobo to close at N1.14 per share at the Nigerian bourse.

The bank’s share price, which hit an all-year low of 0.61 kobo per unit on November 30, closed at 0.95kobo on Friday — before the deal went public.

Access Bank, which also gained over nine percent increase in share price on Monday, however, shed 5.52 percent of its market value on Tuesday, to close at N7.70 per share on Tuesday.

At the close of trading on the Nigerian Stock Exchange (NSE) on Monday, while Diamond Bank Plc appreciated by 9.47 per cent from N0.95 to N1.04, Access Bank Plc went up by 9.40 per cent from N7.45 to close at N8.15.

Investors traded 70.984 million units of Diamond Bank Plc shares worth N72.643 million, while they exchanged 13.615 million units of Access Bank Plc for N108.550 million.

On Monday, the Securities Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) were informed about the details of the acquisition.

The Central Bank of Nigeria (CBN) approved of the merger on Tuesday, stating that it had “no objection” to the “proposed merger with the Diamond Bank Plc”.