By Aduragbemi Omiyale
The Central Bank of Nigeria (CBN) has refuted a viral report that it rejected the N1.04 trillion offered by a London-based investor, Fairview Acquisition Partners, for the acquisition of a 100 per cent equity stake in Polaris Bank Limited.
On October 20, 2022, the central bank announced that it had sold the financial institution for N50 billion to a new core investor, Strategic Capital Investment Limited (SCIL).
This raised eyebrows as some observers questioned the rationale behind selling a bank the CBN had pumped about N1.3 trillion into for a paltry sum of N50 billion.
A few days ago, an online platform, Peoples Gazette, published a report alleging that the apex bank rejected an offer of N1.04 trillion made by Fairview for the lender. It claimed the company was sold to SCIL, a company only registered six months before the deal, with links with associates of President Muhammadu Buhari.
But on Wednesday, the CBN, through its spokesman, Mr Osita Nwanisobi, said Polaris Bank was sold to the preferred bidder, stating that Fairview offered N1.02 trillion for the purchase of two banks, including Polaris Bank.
Mr Nwanisobi, who described the report as “spurious, malicious, and misleading,” stressed that the sale of Polaris Bank underwent due process and was based on the relevant laws, global best practices for bank resolutions, and requisite regulatory approvals.
According to him, senior representatives of the Asset Management Corporation of Nigeria (AMCON), CBN, and reputable legal and financial advisers were actively involved in the divestment of the federal government’s interest in Polaris Bank.
He stated that the divestment committee set up for the process received bids from 25 parties, including Fairview, through the execution of a Non-Disclosure Agreement (NDA), the first stage of the process.
It was stated that Fairview did not execute or return the NDA despite verbally confirming receipt of the agreement and after follow-up from the financial advisors.
“Therefore, Fairview Acquisition Partners did not take the opportunity to update their offer by participating in the divestment process and thus did not make a binding purchase offer for Polaris Bank,” the CBN emphasised.
“The committee, along with its legal and financial advisers, conducted a rigorous technical and financial evaluation of the purchase proposals, assessing promoters’ fitness and propriety, offer price received versus reserve price, funding structure and financial capacity, strategy and growth plans, amongst others.
“Following evaluation, the promoters of the strategic purpose vehicle, SCIL, emerged as the preferred purchaser, having presented the most comprehensive technical/financial purchase proposal and the highest-rated growth plans for Polaris Bank.
“In addition to passing all fitness and propriety tests, the promoters also made the highest financial offer for the bank, which was significantly above its core valuation and reserve price,” the statement said.
It explained that the binding offer of SCIL comprises “an immediate upfront consideration of N50 billion and full responsibility for the debt of N1.305 trillion owed to AMCON, essentially a total purchase consideration of N1.355 trillion.”
“This offer was the most competitive and provided taxpayers and the federal government with more than full recovery of its intervention cost. By the sale, the CBN and federal government achieved a successful, value-driven resolution of a strategic financial institution,” it stressed.
