San­dra Chouthi

Ja­maica Mon­ey Mar­ket Bro­kers Ltd (JMMB) is mov­ing to con­clude its of­fer to ac­quire 100 per cent of Cap­i­tal and Cred­it Fi­nan­cial Group Ltd (CCFG), which is al­so a Ja­maican fi­nan­cial ser­vices com­pa­ny. The of­fer com­pris­es 70 per cent in cash and 30 per cent in new JMMB shares. Ac­cord­ing to the takeover bid cir­cu­lar, the of­fer opened to CCFG share­hold­ers in Ja­maica and T&T on May 25 and clos­es on June 15.

JMMB is list­ed on the T&T, Ja­maica and Bar­ba­dos Stock Ex­changes. CCFG's ser­vices in­clude bank­ing, in­vest­ment se­cu­ri­ties, re­mit­tances, Unit Trust funds, and in­ter­na­tion­al bro­ker/deal­er ser­vices. Ac­cord­ing to the of­fer doc­u­ment, the TT cash pay­ment will be cal­cu­lat­ed on the clos­ing date us­ing the T&T Cen­tral Bank's av­er­age of the J$ buy­ing and sell­ing rates pub­lished on its Web site.

CCFG stat­ed on its Web site that a spe­cial sub-com­mit­tee of in­de­pen­dent CCFG di­rec­tors will con­sid­er the fair­ness of the of­fer and, "with the sup­port of in­de­pen­dent ex­per­tise, the board will make a rec­om­men­da­tion to the share­hold­ers via a di­rec­tors' cir­cu­lar with­in sev­en days." In Au­gust 2011, JMMB made an of­fer to ac­quire 100 per cent of the is­sued share cap­i­tal of CCFG.

CCFG said the hold­ers of CCFG shares, who to­geth­er ac­count for more than 81 per cent of the is­sued or­di­nary share cap­i­tal of the com­pa­ny, are will­ing to take up JMMB's of­fer. "Once the de­sired take-up is achieved and the of­fer clos­es, pay­ment is ex­pect­ed to be made with­in two weeks there­after, which is ex­pect­ed to be June 29, 2012," CCFG stat­ed.

In com­ment­ing on the trans­ac­tion, JMMB's Group chief fi­nan­cial of­fi­cer, Patrick El­lis, not­ed: "It's a win-win for all, in­clud­ing the CCFG share­hold­ers, as they get an im­me­di­ate up­side in two ways. Be­tween Jan­u­ary to Ju­ly 2011, pri­or to JMMB sig­nalling its in­ten­tion to make an of­fer last Au­gust, CCFG's av­er­age share price was J$3.40.

So at an of­fer price of J$4.55 that's 34 per cent high­er. "The sec­ond ben­e­fit comes from 30 per cent of the Of­fer Price in the form of JMMB shares, which pro­vides the CCFG share­hold­ers with an im­me­di­ate 32 to 40 per cent in­crease in share val­ue, as each JMMB share in the swap cal­cu­la­tion is as­cribed a price of J$7.54, be­ing JMMB's book val­ue as at June 30, 2011."

He added: "JMMB's shares cur­rent­ly trade at ap­prox­i­mate­ly TT$0.73 [equiv­a­lent J$9.94] on the T&T Stock Ex­change and J$10.52 on the Ja­maica Stock Ex­change (May 21, 2012)." Kei­th Dun­can, JMMB Group chief ex­ec­u­tive of­fi­cer, said should the JMMB Of­fer be ac­cept­ed by hold­ers of CCFG shares, the ex­pand­ed en­ti­ty will be pos­i­tive for the de­vel­op­ment of fi­nan­cial mar­kets in Ja­maica and the Caribbean. Dun­can ex­pressed op­ti­mism that the bal­ance of CCFG share­hold­ers will see the val­ue of the of­fer.

CCFG, which cel­e­brat­ed its 18th an­niver­sary in Jan­u­ary 2011, saw its af­ter-tax prof­it in­crease by 27 per cent last year. Ac­cord­ing to its Web site, "This is an in­crease to just over J$364 mil­lion, up from the ap­prox­i­mate­ly J$288 mil­lion re­port­ed for 2010.

The Cap­i­tal and Cred­it Mer­chant Bank Group al­so made achieve­ments in the year un­der re­view. The bank­ing group record­ed a mod­est in­crease in prof­it of ap­prox­i­mate­ly J$2.2 mil­lion af­ter tax of just over J$346 mil­lion, up from the J$344 mil­lion re­port­ed for 2010."