Update on Proposed merger of IBTC Chartered Bank Plc and Stanbic (Nigeria) Limited- TENDER OFFER PRICE SOARS BY OVER 36% TO N16.00


Please be informed that all the necessary regulatory approvals (including The Nigerian Stock Exchange, the Central Bank of Nigeria, Securities and Exchange Commission and the South African Reserve Bank) have now been received in respect of the proposed merger of IBTC Chartered Bank Plc (“IBTC”) and Stanbic Bank (Nigeria) Limited (“Stanbic Nigeria”) and the Tender Offer by Stanbic Nigeria’s parent company, Stanbic Africa Holdings Limited (“SAHL”), a wholly-owned subsidiary of Standard Bank Group Limited, for the acquisition of additional IBTC shares.

We had earlier informed you about the structure of the merger involving the merger of IBTC and Stanbic Nigeria, in which SAHL’s shareholding in the enlarged IBTC shall be 33.33% (i.e. 6.25 billion new IBTC shares are to be issued to SAHL, increasing the number of issued shares in IBTC from 12.5 billion to a total of 18.75 billion shares in the enlarged IBTC). SAHL will simultaneously seek to acquire additional IBTC shares from existing IBTC shareholders via a Tender Offer that will be made to all IBTC shareholders, and which aims to increase SAHL’s percentage shareholding in the enlarged IBTC. The Tender Offer, which will be open from Monday, 23 July 2007 to Monday, 13 August 2007, is expected to involve the acquisition by SAHL of between 3,143,750,000 and 4,062,500,000 IBTC shares at a price of N16 per share as opposed to N11.74 per share as earlier proposed. The revised Tender Offer price of N16.00 represents a significant improvement from the initial N11.74 offered by SAHL and represents a premium of approximately 45% to IBTC’s current share price on The NSE.

At the revised tender offer price, IBTC shares are trading at a PE 50.2x relative to the industry weighted average of 34.2x and a projected PE of 33.3x relative to the weighted industry projected PE of 23.7x. This seems to suggest that IBTC shares are trading at a substantial premium (or appears overvalued) to its industry both currently and on a projection basis.

In accordance with The Nigerian Stock Exchange usual stipulation, IBTC’s share price on The NSE has been frozen at N11 since an application was filed with The NSE in connection with the proposed Scheme of Merger, on 20 March 2007 and will remain frozen until the completion of the transaction.

The Federal High Court has granted an Order directing that meetings of the shareholders of IBTC and Stanbic Nigeria (“Court-Ordered Meetings”) be convened for the purpose of considering and if thought fit, approving the Scheme of Merger. The Court-Ordered Meetings have been scheduled to be held on Monday, 20 August 2007. The proposed Scheme of Merger will become effective and binding on all shareholders of IBTC and Stanbic Nigeria if:

- it is ratified by a majority representing three-fourths in value of the shares of shareholders present and voting either in person or by proxy at their respective Court-Ordered Meetings;
- final CBN and SEC approvals are received;
- the Court sanctions the proposed Scheme of Merger; and
- all other conditions precedent in respect of the Tender Offer and the proposed Scheme of Merger have been fulfilled.


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