Access Bank, Union Bank debunk possible acquisition rumour

Motolani Oseni

The management of Access Bank plc and Union Bank of Nigeria Plc have denied any possible acquisition currently circulating on social media.

Access Bank early this year merged with Diamond Bank Plc to become one of the leading financial institutions in Nigeria with total assets crossing N6 trillion with improved staff strength and robust branch network.

The merger has since produced a new Access Bank with a retail and corporate banking focus. It is, however, not clear if Access Bank would be willing to make another acquisition.

Both banks in a statement to Nigerian Stock Exchange (NSE) on Tuesday said the report is a rumour, warning shareholders to disregard the publication entirely.

The Company Secretary, Access Bank, Sunday Ekwochi in a statement said: “Our attention has been drawn to a recent social media report of Access Bank Plc being engaged in talks to acquire Union Bank of Nigeria Plc.

“The NSE and the general public are hereby advised to discountenance such rumour as same is devoid of truth. The bank is not engaged in any discussion with Union Bank of Nigeria or any of its shareholders regarding any such transaction.”

In a swift response, Company Secretary, Union Bank of Nigeria, Mr. Somuyiwa Sonubi, said: “Our attention has been drawn to a blog post on the aforementioned site (and circulating on social media) positing that Access Bank is in talks to acquire Union Bank.

“As the post itself states, the unfounded report is based on ‘mere rumours and speculation’. The Nigerian Stock Exchange, other regulatory agencies and members of the public are advised to disregard the publication in its entirety.”

The report online revealed that Access Bank could be racing to acquire Union Bank of Nigeria.

According to anonymous sources close to the bank, it is rumoured that discussions are ongoing on the possibility of acquiring the tier two lender.

People familiar with the matter said the recent order by the Central Bank of Nigeria for banks to have a minimum capital base of about N100 billion for all national lenders may have prompted the rumour.

Sub-saharan Africa focused financial services group, Atlas Mara Limited, is the single largest shareholder in Union Bank.

Atlas Mara bought its first stake in Union Bank in 2016 and it has since increased its stake more than two times via rights issue participation and a stake sale in Atlas Mara to Fairfax Africa Holdings which issued a bond to increase Atlas’ stake in Union Bank in 2017.

In 2018, Atlas Mara announced that it has agreed to acquire an additional 280,956,166 shares of Union Bank of Nigeria, approximately one per cent shareholding in UBN, following which its combined direct and indirect shareholding in UBN will increase to 49.0per cent from 48.0per cent.

The company issued 2,360,032 ordinary shares to its shareholders as consideration for the UBN shares acquired.

Among its portfolio of financial institutions, Union Bank is Atlas Mara’s largest company by asset base. A sell-off of its stake in the bank could be its opportunity to get something out to its shareholders.

Going by its strategy to take the Nigerian market seriously, there are speculations that the Bob Diamond led banking group could as well opt for equity only acquisition that will give it a share of Access Bank.