It was mixed performance for the shares of Access Bank Plc and Diamond Bank Plc on the second trading day at the stock after the confirmation of the business combination by both financial institutions.
The shares of both banks had surged the first day after the confirmation as investors swooped on the shares at the stock market.
However, on the second day of trading, the shares of Diamond Bank Plc continued to rise while those of Access Bank Plc depreciated. Diamond Bank Plc share price appreciated by 9.62 per cent, higher than the 9.47 per cent recorded the previous day, to close at ₦1.14. Holders of the stock appear not to be willing to part with their shares as only 2.235 million units were traded at ₦2.548 million in 27 deals.
On the contrary, Access Bank Plc share shed 5.52 per cent, compared with a gain of 9.40 per cent the previous day. The stock fell from ₦8.15 to ₦7.70 per share as investors traded 22.208 million shares worth ₦179.122 million in 421 deals.
Market analysts said the renewed demand for Diamond Bank shares is understandable as investors see it as way to buy into Access Bank that has a higher price. The board of Diamond Bank had said on Monday that it had reached an agreement to combine its businesses with that of Access Bank subject to approval of regulators and shareholders.
The proposed merger would involve Access Bank acquiring the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a Scheme of Merger.
Based on the agreement reached by the boards of the two financial institutions, Diamond Bank shareholders would receive a consideration of ₦3.13 per share, comprising of ₦1 per share in cash and the allotment of two new Access Bank ordinary shares for every seven Diamond Bank ordinary shares held as at the implementation date.
Immediately following completion of the merger, Diamond Bank would be absorbed into Access Bank and it will cease to exist under Nigerian law.
And some stock market operators said the business combination was a welcome development that seemed to be more favourable to Diamond Bank Plc.
Mr. David Adonri of Highcap Securities Limited, said: Diamond Bank Plc has been failing. Merger with Access Bank has finally rescued the bank from imminent collapse. The terms of merger weights heavily in favour of Diamond Bank Plc.”