Are Proven & NCB buying 36% of Guardian?

Investment banker Proven Investments and National Commercial Bank, Jamaica’s number one banking group, are lining up to acquire some large blocks of shares in Guardian Holdings, the Trinidad & Tobago company. IC Insider has confirmed that the targets are – Tenetic Limited block of 35.84 million, which, amounts to 15.46 percent of the company and Arthur Lok Jack’s direct holding of 6.29 percent or 14.59 million units. Arthur Lok Jack’s is listed as having a beneficial interest in Tenetic. Royal Insurance Trinidad holds 22.33 million units or 9.63 percent and RBC Trust T&T controls 4.99 percent or 11.57 million shares.
Lok Jack wants out, as various sources indicate that his holdings were partially funded by borrowings and he now needs to liquidate the debt. Royal Bank, according to our sources, is moving completely out of the Caribbean region. This sale would be another aspect of their exiting. RBC sold the Jamaica operations last year to Sagicor Group and the Suriname operation to Republic Bank of Trinidad, slated to be sold the Cayman operation.
The acquisition of Guardian would be a complete reversal, returning the company to its Jamaican roots. Guardian was once majority owned by Jamaica Mutual life, but Mutual sold out their holding sometimes before they ran into Jamaica’s problems and folded. The Jamaican entities consider the company to be clean, well run and considerably undervalued. Part of the plan is to increase the dividend payments, which is just a third of profits and relist the shares on the Jamaica Stock exchange once more. No time frame was given when the deal will be sealed, but Proven has just raised approximately US$30 million in a rights issue of shares, so they are well prepared to take up their share with borrowings being a part it of the funding.
Guardian traded in Trinidad at TT$14.26 or U$2.23 on Wednesday. This would mean that the sale to Proven and NCB stands at a whopping U$$188 million, representing approximately 84.33 million units or 36.37 percent of the current share capital of 231.9 million units.
Guardian is primarily a Life Insurance company but also owns a general insurance arm. NCB operates the well known OMNI Life Insurance Company. Part of the likely synergy in future would be a merger of general insurance companies with Omni to be sold to the Life Insurance arm, enjoying economies of scale. The possibility exists that and the expanded general Insurance company could be listed on the stock exchanges within the Caribbean, thus spreading the risk associated therewith.
Guardian reported total revenues of TT$4.8 billion in 2014 and profit to shareholders of TT$401 million. Total shareholder equity stood at TT$2.9 billion and net asset per share TT$2.65. Dividends paid was 57 cents, covered by profits to the tune of just over three times.
Last year Proven acquired a block of shares in Knutsford Express bring their total holdings to 20,000,002 units or 20 percent of the company and 49 percent of Access Financial Services.Proven Investments is chaired by the leading Jamaican Lawyer, Hugh Hart, a former senator and minister of government under the Jamaica Labour Party regime of the 1980s. Some of the top shareholders include directly, or through companies they are connected to are Hugh Hart, Garfield Sinclair, CEO of Cable & Wireless Jamaica, Christopher Williams, President, Proven Investments and former manager of NCB Capital Markets, an NCB subsidiary; Senator Mark Golding, Justice Minister; Peter Bunting, Security Minister and Paula Kerr-Jarret. Transport and Works Minister Omar Davies is also a holder of shares in the company.
Patrick Hylton, President of NCB, is a director of Massy Holdings, of which Lok Jack is the Chairman.