FirstCaribbean International Bank has stated that, further to its announcement on March 13th, 2006, its majority shareholders, CIBC and Barclays Bank have reached a definitive agreement for CIBC to acquire Barclays 43.7% ownership stake in FirstCaribbean.
As previously announced, CIBC will pay US$1.62 for each FirstCaribbean share for a total price of approximately US$1.08 billion. This transaction, which is conditional upon regulatory approvals, is expected to close by the end of 2006. Once it is completed, CIBC will own 87.4% of FirstCaribbean, with the remaining shares held by regional investors.
Under the definitive agreement, CIBC has the option of paying for the transaction in cash, CIBC common shares, or a combination of cash and shares, the relative proportions of which CIBC will determine before completion.
Promptly after the closed of transaction, CIBC will be required to make a mandatory offer to all shareholders in FirstCaribbean. The mandatory offer will also be at a price of $1.62 per share.
The parties have agreed to structure the transaction in two stages, with Barclays selling 90% of its holding initially and CIBC potentially acquiring, at Barclays option, the balance in its subsequent mandatory tender offer. CIBC will also pay an additional sum to Barclays, as well as the other shareholders who tender their shares to this offer, to reflect dividends in respect of their period of ownership prior to closing.
Both CIBC and FirstCaribbean have reiterated their commitment to maintaining a strong minority ownership that they expect to grow in the future.
