Access Bank Plc emerged the biggest loser at the Nigerian Stock Exchange on Tuesday as some investors sold off their shares.
The bank had on Monday confirmed its proposed merger with Diamond Bank Plc after initial denial by both financial institutions.
Following that confirmation, Access Bank recorded a 5.52 per cent decline in its share price as it fell to N7.70 on Tuesday from the N8.15 recorded on Monday.
The share price had gained 9.40 per cent on Monday to close at N8.15 from N7.45 on Friday.
That gain was pared on Tuesday as the bank’s share price fell, while the volume of trade increased by 63.11 per cent to 22.2 million units from 13.6 million units on Monday.
On the other hand, Diamond Bank’s share price increased further, gaining 9.62 per cent to close at N1.14 per share on Tuesday.
Investors reacted to the news of the proposed merger, leading Diamond Bank to emerge the highest gainer on Monday as its share price gained 9.47 per cent to close at N1.04 from the 95 kobo recorded on Friday.
The PUNCH quoted managing director of Afrinvest Securities Limited Ayodeji Ebo as saying a lot of investors sold off their shares in Access Bank because they might not see gains in a long time.
“In actual fact, the impact of the acquisition will not come into play until the last quarter of 2019. If you are not a very long-term investor, it will not transfer to capital gains. That is why people sold off their shares in Access Bank today.
“Yesterday, before investors did their proper analysis, the share price gained almost 10 per cent. So, what happened today was just the shedding of the gains recorded on Monday.
“We have a lot of investors that are sceptical about the shares in Diamond Bank too, because a consideration price has been agreed on, which may be reviewed, as we saw in the case of Access Bank’s acquisition of Intercontinental Bank,” Mr Ebo said.
Confirming the proposed merger in a statement on Monday, CEO of troubled Diamond Bank Uzoma Dozie said the exercise “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.”
Diamond Bank shareholders, he added, “will receive a consideration of N3.13 per share, comprising N1 per share in cash.”
Access Bank CEO Herbert Wigwe assured “AccessBank has a strong track record of acquisition and integration and has a clear growth strategy.”