Union Bank of Nigeria (UBN) Plc is seeking approval of its shareholders to distribute its entire shareholdings in its United Kingdom’s subsidiary to its shareholders.
The board of directors of UBN has called an extra-ordinary general meeting of Union Bank’s shareholders to consider and approve the proposed divestment of the bank’s entire shareholdings-direct and indirect, in Union Bank UK Plc (UBUK) to the shareholders of UBN.
In a regulatory filing at the Nigerian Exchange (NGX), UBN indicated that its equities in UBUK will be distributed to its shareholders pro rata to their existing shareholding interests in UBN, subject to obtaining any required contractual consents and regulatory approvals.
Under the planned divestment and distribution, the shares to be held in UBUK by shareholders of the UBN who each hold less than 0.2546 per cent of UBN’s issued share capital shall be placed under a trust to be established with Stanbic IBTC Trustees Limited (SITL). SITL shall be the legal shareholder of record in UBUK’s register, acting as trustee of the beneficial interests of the relevant UBN shareholders.
Shareholders are expected to approve and authorise SITL to, on behalf of the shareholders, enter into and execute all such agreements and documents, appoint such professional advisers and other parties as may be required, take all such actions and steps and do all such other lawful things as may be necessary for and incidental to, administering the trust in such manner as SITL, acting reasonably, considers appropriate in its capacity as trustee and for giving effect to the trust and or divestment.
The proposed divestment through the distribution of UBUK’s shares came after UBN failed to consummate its previous sale of the UK subsidiary.
UBN had in January 2020 entered into a share sale and purchase deal to divest its 100 per cent equity stake in UBUK. The board of Union Bank had stated that the sale was in line with the bank’s strategy to geographically streamline its business operations to focus on growth opportunities in Nigeria.
According to the bank, following a competitive bid process, MBU BidCo Limited (MBU), an acquisition vehicle wholly owned by MBU Capital Limited (MBU Capital), was selected as the preferred bidder. The completion of the sale was however subject to regulatory approvals from the relevant regulatory authorities in Nigeria and the UK.
MBU Capital is an investment management firm founded in 2013 and based in Mayfair, London. It has interests in financial services, healthcare, education, real estate and technology. MBU Capital (UK) LLP is authorised and regulated by the Financial Conduct Authority.
UBN subsequently classified UBUK as “available for sale” as the parties sought to complete the sale process, although delayed due to the pandemic-induced lockdowns.