It is now official National Commercial Bank (NCB) will be acquiring nearly 30 percent of Guardian Holdings subject to regulatory approvals, making them the largest shareholder in the Trinidad based company that was previously controlled by Jamaica Mutual Life.
The announcement now confirms the ICInsider.com report earlier in the year of NCB’s strong interest in the insurance group of companies. The move is in keeping with IC Insiders’ earlier understanding that both NCB and Proven Investments were targeting approximately 36 percent of Guardian, with the targets being – 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. The release from the Guardian shareholders indicates that IFC, who recently bought into Group, is one of the sellers, with no mention of RBC.
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, who sold out their holdings sometime before they ran into problems in Jamaica and folded. The Jamaican entities consider the company to be clean, well run and considerably undervalued. Guardian last traded in Trinidad at TT$13.90.
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 that both entities own, with Omni to be sold to the Life Insurance arm, resulting in economies of scale. The possibility exists that an expanded general Insurance company could be listed on the stock exchanges within the Caribbean, thus spreading the risk associated therewith. Guardian’s profit attributable to equity shareholders for the nine months to September was $235 million, down from $286 million for 2014.
Net Income from Insurance Activities grew by $80 million to $533 million from $453 million in 2014, however. Investment activities generated net income of $527 million as against $629 million in 2014, a result significantly affected by the fair value losses of $66 million (2014 gains $27 million) that were occasioned by extreme market uncertainty during the month of September. IC Insider estimates that NCB could see profits rising around 40 cents per share for the 2016 financial year if the deal is finalized soon and on the assumption that the price is around the last traded price of the stock.
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.
No stock fell on TTSE Wednesday
Guardian Gained in trading on Wednesday but the stock could benefit in the future from the take over of large blocks of shares.
At the close of the market, the Composite Index rose 0.17 points to close at 1,153.41, the All T&T Index rose 0.34 points to close at 1,968.83 and the Cross Listed Index remained at 44.32.
Gains| Stocks increasing in price at the close are, Ansa Mcal trading 1,500 shares to close with a gain of 1 cent at $67.02, Guardian Holdings trading 1,180 shares closed with a gain of 7 cents to end at $14.26. Proven Investments and National Commercial Bank are slated to take a major stake in the ownership in Guardian that once was majority owned by Jamaica Mutual Life.
Firm Trades| Stocks closing with prices unchanged at the end of trading are, Angostura Holdings with 715 units at $13.90, Clico Investment Fund closed at $2.55 with 1,300 units, First Citizens Bank trading 1,875 shares to close at $35.78, Guardian Media trading 912 shares at $19.76, JMMB Group contributing 185,655 shares at 50 cents. Massy Holdings traded just 6 shares to close at $63.43, National Enterprises
with 1,000 shares closed at $17.30, One Caribbean Media ended trading with 876 units at $22.30, Prestige Holdings had 662,100 units changing hands at $10 with a value of $6,621,000. Republic Bank had 2,650 shares trading with a value of $304,750 to close unchanged at $115, Scotiabank traded 5,600 units to close at $62.50 carrying a value of $350,000.IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 4 stocks with the bid higher than their last selling prices and 1 stock with the offer that is lower.
