Insurance Resourcery Consultancy Services Limited said it has completed the acquisition of 75% worth of Wema Bank’s majority equity stake in Great Nigeria Insurance (GNI).
The takeover of the 2.87 billion units of equity valued at about N3.24bn was contained in a report by the 56-year-old insurance firm.
A transaction document obtained by NEWSVERGE showed that the divestiture was concluded with the transfer of Wema Bank’s shares to Insurance Resourcery through a special purpose window of the Nigerian Stock Exchange (NSE).
This follows Central Bank of Nigeria (CBN)’s banking regulatory regime that required banks to either divest from non-core banking subsidiaries or form a holding company to hold those subsidiaries, Wema Bank had opted to divest from its non-core banking businesses including GNI.
The report showed that a total of 2.87 billion ordinary shares of 50 kobo each of GNI were crossed in a single deal to Insurance Resourcery at N1.13 per share through the negotiated cross deal window of the Exchange.
The negotiated cross deal platform of the Exchange is a special-purpose trading platform that is meant for voluminous transaction. The negotiated cross deal allows the parties to the deal to close the deal at reduced cost.
At N1.13 per share, the transaction cost represents 126 per cent increase on the current market value of GNI, which for now is 50 kobo per share. GNI currently has total paid up capital of 3.827 billion ordinary shares of 50 kobo each.
The transaction took about 5 years to materialise. IRCSL was said to have submitted an Expression of Interest (EOI) to Wema Asset Management in September 2011.
The new core investor, Insurance Resourcery Consultancy Services Limited, will be required to restructure GNI’s issued share capital to allow more investments from the general investing public.
Great Nigeria Insurance PLC is one of the oldest and leading insurance firms in Nigeria. It started operations in 1960 and its businesses include general and life insurance.