Finally, it has happened: Union Bank shifts hands. In March 2021, I predicted that Atlas Mara would not survive 2021 without selling its stakes in Union Bank. I had looked at their financials and concluded that it was hopeless going into 2022 without fixing its many paralyses via Union Bank disposal.
Union Bank wrote and dismissed the “rumours”. I shared here: “Union Bank Plc has updated me after the piece on a rumoured deal …. The bank has clearly noted that it was all rumour and nothing there. I have posted the full feedback. Please take note accordingly. Yet, I will not delete the piece …!”. (I do not write such insightful pieces these days to avoid making people feel bad. This one was easy as Atlas Mara was struggling and to become whole, it must sell assets – and Union Bank was the only important asset left.)
But today, the lender has put a notice: “Titan Trust Bank Limited (TTB) has become the majority shareholder in Union Bank of Nigeria Plc. This followed an agreement by Union Global Partners Limited, Atlas Mara Limited and other majority shareholders to divest 88.39 per cent shareholding in Union Bank to TTB….subject to regulatory approvals and other financial conditions, would upon completion transfer 89.39 percent of Union Bank’s issued share capital to TTB.”
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The full press release below..
Chair, Union Bank, Mrs. Beatrice Hamza Bassey said:
“On behalf of the Board, we congratulate all the parties involved in reaching this phase of the transaction and the Board looks forward to supporting the next steps to ensure a seamless completion of the process following regulatory approvals. We are grateful to our current investors whose significant and consequential
investments over the past nine years facilitated the transformation of Union Bank, one of Nigeria’s oldest and storied institutions. Today, the Bank is well-positioned with an innovative product offering, a growing customer base of over six million and consistent year on year profitability. This is a solid foundation for our incoming investors to build on as we move into a new era for the Bank.”
Chair, Titan Trust Bank, Mr. Tunde Lemo, OFR said:
“The Board of Titan Trust Bank and our key stakeholders are delighted as this transaction marks a key step for Titan Trust in its strategic growth journey and propels the institution to the next level in the Nigerian banking sector. The deal represents a unique opportunity to combine Union Bank’s longstanding and
leading banking franchise with TTB’s innovation-led model which promises to enhance the product and service offering for our combined valued customers.”
This is the full press release (PDF)
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You can tell us that you are as fit as fettle, but when you cannot do what healthy people do, then we are left with no option than to declare you sick.
The old Big, Strong and Reliable has six million customers, after over hundred years of existence, but is now telling you that it has been repositioned with innovative packages, perhaps to lead a renaissance in the financial space.
May you live in interesting times…
Talking about the exploits of Atlas Mara in Africa, here’s a piece I only recently mused over…
https://link.medium.com/yGZqdGW0dmb
Interesting indeed
not sure anyone will read this, but you had to read the Atlas Mara financial reports with a grain or
two of salt:
out of the $441M of debt, you had $126M belonging to the banks in the discontinued part of the
group, Botswana $58.2M and Zimbabwe $30.6M.
That makes the corporate direct debt $226.2M (which is still a fair amount for a holding company).
Selling Rwanda, Mozambique, Botswana and Zambia got them ~$164M plus transferred $184.2M
of bank debt to new owners. on top of that deffered purchase price of ~$24M should be coming
over the next 2 years. that leaves $106M (I assume 4% interest for the average 6 months until
deals take place). I ignore the deffered portion of $24M.
Remaining assets are:
1. Zimbabwe which has > $50M in equity and $30.6M debt. market price should be much higher
than book value.
2. 45% in UBN which is in the process of being sold by 89% holders (including Atlas Mara) to
Titan trust for a rumored $1B (1.5 times book value).
if you assume $400 net part of Atlas Mara in UBN, you get over $2.5 per share in value for
Atlas Mara. thats after they took out their public share holders at about $0.10 in November
of 2021.