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Bid to block Republic takeover
Republic Bank has been named as a defendant in legal proceedings brought on behalf of HFC Bank in the High Court of Ghana. The bank yesterday confirmed that it, along with Ghana’s Securities and Exchange Commission, has been named in an injunction which seeks to prevent Republic Bank from continuing the process for a mandatory offer to all shareholders of HFC Bank.
On Monday, an application by Republic Bank to dismiss the action was heard by his Lordship Justice Koomson at Commercial Court B in Accra, Ghana. The matter was adjourned for parties to file written submissions and set down for ruling on Monday. Republic Bank said it was disappointed “that these legal proceedings have been resorted to, as they have delayed the mandatory takeover process”.
The bank said in a media release: “Republic Bank is confident, however, that the matter will be successfully resolved, thereby allowing shareholders to exercise their rights to consider whether to sell their shares.
“Republic Bank holds integrity at the core of all its relationships; generating trust and confidence from its customers, suppliers, shareholders and the general public. The bank consistently demonstrates honesty, fairness and openness in everything that it does, and its business processes and practices support service excellence while protecting the interest of its customers, its employees and its shareholders.”
The legal challenge is just the latest hurdle facing Republic in its bid to acquire HFC Bank. Last month officials of the T&T bank said they were planning to complete the takeover by December. However, the Ghana bank is claiming there was a breach of procedure in the execution of the Securities and Exchange Commission’s code on takeovers and mergers and is challenging the sale of some of the shares sold to Republic bank.
Republic Bank’s corporate secretary Jacqueline Quamina is assuring interested parties at HFC that nothing would change if they are able to take over. “This is because we like the current management and staff currently in place at HFC bank. What we might just do is bring in some personnel with some expertise to help with the training of staff to aid the growth of the bank,” she said.
Quamina denied reports that the takeover is hostile and also ruled out any immediate plans to re-brand HFC if Republic Bank is successful with the takeover. Republic Bank purchased 8.79 per cent shares in HFC Bank for US$8 million in December 2012 when the Ghana bank floated 112,420,246 ordinary shares under a private placement.
Republic’s stake further increased to 32.02 per cent with the purchase of 23.23 per cent additional shares previously held by Aureos Africa Fund LLC in June 2013. It further acquired 7.98 per cent additional shares from Union Bank of Nigeria which increased its shareholding in HFC to 40 per cent. The takeover has been fiercely resisted by some HFC shareholders, including its managing director Asare Akuffo who owns 0.30 per cent shares in the bank.