Shareholders pave way for bank sale

| 11/10/2018 | 19 Comments
Cayman News Service

Cayman National

(CNS): Despite some dissenting voices, the majority of shareholders of Cayman National have voted to remove a restriction that prevented any single entity from owning more than 10% of the bank’s shares in order to pave the way for its sale to a regional financial corporation. Following a meeting of shareholders Tuesday, they voted by a significant margin to approve a special resolution, subject to regulatory approval, amending the Articles of Association to delete the clause that limited individual ownership. 

Although the change has not yet been approved by government, it now appears very likely that the last Caymanian-owned bank will be sold to the Republic Bank Trinidad and Tobago (Barbados) Limited. The final step in that process will happen when enough shareholders tender their shares by completing the necessary paperwork by 22 October.

If shareholders agree to sell at least 51% of the bank’s shares, the deal will go through and all shareholders will receive $6.25 per share — a premium of more than $3 on the share price on the day that the unsolicited offer was first made by the Republic Bank. The acquisition will then be finalised, subject to government and regulatory approvals.

It is understood that shareholders with an accumulative total of at least 77% of shares have already agreed to sell, which makes the deal all but certain.

According to shareholders who were at the meeting, there were a number of shareholders who made it clear they did not want to sell. Al Thompson, the owner of the largest hardware store in the Cayman Islands, said he did not trust the company making the offer.

Clarence Flowers Jr, one of the directors of the board whose family is a major shareholder in the bank, did not support the change to the articles. This followed the revelation in an earlier circular from the bank that he had not agreed to sell any of his own shares or the more than 1.3 million owned by his family.

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Category: Banking, Business

Comments (19)

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  1. Anonymous says:

    At the meeting, CNC Directors could not say definitively that they did due diligence on the background of Republic Bank, ownership, directors, etc. Subsequently it has been reported that Jack Warner is one of the main shareholders – approx 51%. Jack Warner is presently under US indictment in the FIFA scandal and has an arrest warrant over his head – he cant go near US territory otherwise he’ll be grabbed by US authorities. He is known for corrupt activities in Trinidad while he was a Government Minister.

    Why have CNC Directors accepted an approach from a bank with associations to such a person? Clearly Republic wants CNB so as to “clean-up” their image, as Al Thompson suggested. Clearly CNC shareholders should have been told this and perhaps would have rejected this approach. What other “dirt” might Republic be involved in?

    Time for Dart to present a higher counter offer to CNC!! Keep CNB Caymanian!

  2. Anonymous says:

    Who cares!!! The islands would be better off if Cayman Air and Turtle Farm….two large white elephants were not getting govt subsidies!!! People. Please think.
    Where is the new Governor by the way? Is this another Latin Republic like run place?

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  3. nickcayman says:

    When banks abandoned American Samoa

    By 2016, American Samoa was desperate. Its economy and population had been shrinking for years and hopes of a turnaround fell as the verdant volcanic islands in the South Pacific withered into banking desert.

    The Bank of Hawaii announced in 2012 it intended to leave the U.S. territory entirely. It agreed to hang on until a successor could be found but scaled back services.

    By 2016, officials and consultants say, no new loans had been issued for four or five years. Consumers who couldn’t afford to travel to Hawaii or the mainland resorted to backyard lenders and paid usurious rates.

    In their desperation, the islanders found inspiration in early frontiersman and prairie progressives who had likewise found themselves on the margins of the American economy.

    https://www.washingtonpost.com/news/wonk/wp/2018/05/09/when-banks-abandoned-american-samoa-the-islands-found-a-century-old-solution-that-could-be-the-future-of-finance/

  4. Anonymous says:

    Shareholders, it’s time to get that money, honey.

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  5. Silva Foxx says:

    I for one will walk away from CNB if they sell. Time to start another local Bank/Credit Union.

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  6. Debbie Ebanks says:

    A very DANGEROUS move
    Why do we want to be linked to a Trinidad company. The ONLY country in our Jurisdiction that is on the SANCTIONS List
    No choice Country Reputation vs Individual Greed

    Our LEADERS PLEASE that heed and deny this change YOU HAVE THE POWER

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    • Anonymous says:

      why are you crying to the leaders? the only people you should be pleading to the Caymanians who salivate at the prospect of selling to anybody. There seems to be sense of national pride or leaving anything for the future generation. this me me me mindset is the exact thing that is causing the political and economical devastation of many other countries.

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  7. Anonymous says:

    Trinidad National Bank….what a ting

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  8. Anonymous says:

    For clarity SOME shareholders were willing to sell, hence the 77% vote. And they only voted to remove the article 7 restriction which in essence means anyone (in the right financial position and with the right intent, and supercedes the current offer of USD 6.25 per share ) can now hold >10% of voting rights via shareholdings, not just the current bidders, HINT HINT.

    At the end of the day each individual shareholder will have to make the decision to sell or keep.

    Food for thought- Just watched a warren buffet interview recently. At 88 years old with a net worth of over $89 billion, he still sticks with the “buy and hold” investment strategy to focus on long term growth than short term gain.

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    • Anonymous says:

      So there’s a further aspect to this, which is that people who aren’t sure the sale will proceed can sell their shares at more than market value but less than offer price, and still make a return on their investment without selling to the big bad bidder from the east. Most of the profit, almost none of the guilt. Lots of permutations here motivating people in different ways, and we’ll just have to see. Even Clarence Flowers is making a strategic decision – he will be the only director controlling a large shareholding and will be hoping his shares and those of his family rise in value in the years following the takeover, even though he is not helping the takeover to succeed. This is all about money, risk and opportunity cost folks.

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  9. Anonymous says:

    If a bank is your identity, you need witness protection. BTW the price is fantastic.

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  10. Anonymous says:

    Well done to Al T and Mr. Flowers we need more of your caliber of men to stand and protect the very dream your family and my father did to ensure the bank remain a bank for the Caymanian people and for the country to be proud of. I understand the Premier believes this deal is a good deal for the shareholders and the country. Never in modern day history of politics you hear of a premier in any of the Caribbean jurisdiction saying selling your identity is good. It is American Airlines approaching us to purchase cayman airway, or the turtle farm or stingray city or Pedro St James. CnB has been on our landscape for over 40 years and due to a few greedy directors and shareholders, this business will no longer be Cayman owned.

    Shame on the directors for pushing the poor deal as we will never know why only one consulting firm was contracted to come up the sell price. Why have two for transparency purpose. CNC shares were at $12.50 in the 90’s and that is without any bids for the business. The share dropped due to the economic situation globally. Rates are increasing and markets are doing and are expected to do well for some time to come. So the big question in the room that no one can answer is why sell and why such a low price?

    Honorable mention to Mr. Dean Scott. We need people like you, mr. Thompson and mr. Flowers for premier!

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    • Anonymous says:

      I only wish we could find a sucker to purchase turtle farm. Its a national hemorrhage that cost us dearly.

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    • Just saying says:

      That’s an easy reply to the question of only obpne firm involved in the pricing. Perhaps if you look at the Annual reports for a number of years there you may find some kinda clue.

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      • Anonymous says:

        Okay 10:02AM at least you are to something. If Mr. Thompson and Mr. Flowers are truly concerned then they should look at the Annual Reports of Republic and all of its associated companies – paying attention to read the all of the notes.

        Find out why Republic has outstanding law suits. Perhaps a little due diligence in checking with the many multi-national organisations that oversee financial institutions, a little research on some of their directors and senior management – plenty of information to consider.

        Does anyone truly think that CIMA and our government will in any way shape or form try to stop this sale from happening – oh it is to laugh.

        CNB – started by Caymanians, run by Caymanians and sold out by Caymanians.

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    • Anonymous says:

      it would be great if Mr Thompson and Mr Flowers, two noteworthy Caymanians, could assemble a group of Caymanians to make a counter offer for the bank thus retaining its identity. I have a very very small shareholding in the bank and I do not bank there and want sell my shares but if a local group could be assembled to make counter offer at similar or higher price it would be preferable than selling it to Trinidad interests. RBC in Bahamas had branches in some of the Out Islands for many many years and recently closed them so if the Trinidadians are in majority ownership of the bank it will be no assurance that they will not close Brac branch thus leaving it without banking facilities whereas I would think a majority locally owned institution would be more patriotic

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    • Anon ! says:

      So why don’t they buy it?

  11. Richard Lewis says:

    Booi how many of the opposition leaders you saw casting their shareholder vote against the sale. They never even had the ability or the foresight to invest and they now have the gall to object. You have no say if you never invested in this entity.

    If you wish to have a say then do as the stalwarts did initially in starting the bank in 1974….now gather a group and buy out the shares as a a counter measure to RBTT.. Any takers?????

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    • Anonymous says:

      Exactly. It’s fine for people to say a shareholder is “selling out their country”, however us little potatoes have invested our few dollars in the first place for hope of a return.

      The clause threatening to force a sale after the fact at far below market value is a strong motivating factor.

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