Canada-owned Scotiabank raised its offer to buy out the minority shareholders of Scotia Group Jamaica (SGJ) to $75 a share from $61.50, days before they vote.
At $75, the offer values the roughly 848 million shares that Scotiabank does not already own at $63.6 billion, up from about $52.1 billion at $61.50, an increase of about $11.4 billion, according to Financial Gleaner calculations.
Investors reacted quickly Tuesday. Buyers bid $66 for SGJ shares in midday trading on the Jamaica Stock Exchange, about 12 per cent above Monday’s close, while sellers asked $70.
SGJ said in a release that its majority shareholder, Scotiabank Caribbean Holdings Ltd, tabled the improved proposal after the Jamaican company posted significant second- and third-quarter results. SGJ amended the June 11 arrangement agreement to reflect the new price. All other terms stay the same.
Scotiabank Caribbean Holdings, which Canada’s Bank of Nova Scotia ultimately owns, holds 72.76 per cent of SGJ’s 3.11 billion issued shares, up to July.
The $75 price represents a premium of about 38 per cent to the 30-trading-day volume-weighted average price on the exchange on June 11, the last trading day before the announcement.
“The improved offer recognises performance and the positive movement in our share price, while providing minority shareholders with an opportunity to realise immediate value at a substantial premium. We believe the revised offer will be received positively by the market,” said Audrey Tugwell Henry, SGJ’s president and chief executive.
The increase follows an independent valuation that had judged the earlier price fair. Ernst & Young Services Ltd, adviser to SGJ’s Independent Committee, found the buyout fair from a financial point of view to minority shareholders, according to the Scheme Booklet. That assessment covered Scotiabank’s opening proposal of $60. The committee then unanimously recommended the $61.50 deal. Ernst & Young also cautioned that a fairness opinion does not guarantee the best available price. SGJ’s release does not say whether the firm revised its view at $75.
Scotiabank first proposed $60 on April 28 and lifted it to $61.50 on June 10, before the announcement. The new price stands 25 per cent above the opening proposal.
“The improved offer represents a significant increase in value for minority shareholders,” said Jabar Singh, Scotiabank’s president for the Dominican Republic and the Caribbean. He said the bank aims to give shareholders “immediate and certain value”.
Some large institutional shareholders have signed voting support arrangements for the transaction at the higher price. They hold 21.12 per cent of the minority shareholding.
The minority shareholders’ meeting remains set for 11 a.m. on October 7 at the AC Marriott. The scheme needs a majority in the number of minority holders voting and at least 75 per cent in value of the votes cast, plus court approval. If shareholders approve, the deal should close in the fourth quarter of 2026, subject to court approval and other customary closing conditions.
Shareholders can take payment in either Jamaican or US dollars, based on the Bank of Jamaica’s weighted average selling rate three days before settlement.
business@gleanerjm.com
