PINK
BRIDGETOWN, Barbados:
FIRSTCARIBBEAN International Bank has stated that, further to its announcement on March 13, its majority shareholders, CIBC and Barclays Bank, have reached a definitive agreement for CIBC to acquire Barclays 43.7 per cent stake in FirstCaribbean.
CIBC will pay US$1.62 for each FirstCaribbean share for a total price of approximately US$1.08 billion. This transaction, which is conditional upon regulatory approvals, is expected to close by the end of 2006. Once it is completed, CIBC will own 87.4 per cent of FirstCaribbean, with the remaining shares held by regional investors.
Under the definitive agreement, CIBC has the option of paying for the transaction in cash, CIBC common shares, or a combination of cash and shares, the relative proportions of which CIBC will determine before completion.
Promptly after the close of the transaction, CIBC will be required to make a mandatory offer to all shareholders in FirstCaribbean. The mandatory offer will also be at a price of $1.62 per share.
The parties have agreed to structure the transaction in two stages, with Barclays selling 90 per cent of its holding initially and CIBC potentially acquiring, at Barclays option, the balance in its subsequent mandatory tender offer. CIBC will also pay an additional sum to Barclays, as well as the other shareholders who tender their shares to this offer, to reflect dividends in respect of their period of ownership prior to closing.
"We are delighted that with this definitive agreement we are well on our way to concluding the transaction," FirstCaribbean's CEO, Charles Pink, commented.
"This transaction leaves FirstCaribbean well positioned for its future development," said Naguib Kheraj, group finance director of Barclays PLC. "While the combination of Barclays and CIBC's Caribbean retail banking assets created value for all stakeholders, the future strategy of FirstCaribbean is now best pursued with one controlling shareholder."
