Scotiabank today announced an increase in the price to acquire the shares of the minority shareholders in Scotia Group Jamaica to $75 from $61.50 per share that was originally offered in June. The new offer of $75 per share represents an increase of just over 12 percent over the original offer.
According to the release, “the offer was increased due to Scotia Group Jamaica’s significant second- and third quarter results. SCHL agreed that an increase to the purchase price in their proposal was warranted to provide shareholders with additional value and facilitate the successful completion of the Transaction.”
“Some large institutional shareholders entered into voting support arrangements in favour of the Transaction at the increased price. These shareholders collectively hold 21.12% of the minority shareholding in SGJL.”
Importantly, since the offer was announced in mid June NCB Group shares climbed from %2 to a high of $77.99 and have been trading around $67 since. This move would have encouraged institutional investors to demand more for their shares.
Since COVID, Scotia Group slashed the annual dividend from an average over 40 percent of profits that they have been paying for years to the high 20 percent level. The new price has not factored in the dividend shortfall of several years.