Months after the abrogation of the Merchant Bank Ghana Limited and the First Rand Bank of South Africa takeover deal, the majority shareholder of Merchant Bank, Social Security and National Insurance Trust (SSNIT) has settled on Fortiz, a wholly owned Ghanaian firm as the new buyer.
A couple of months ago, the relatively unknown Fortiz, was one of the three shortlisted companies which participated in the Merchant Bank takeover deal. Fortiz is made up of a consortium of investors in the banking and real estate sectors of the country.
According to insiders of the deal, the ailing Ghanaian bank is going for GH¢ 140 million and it is expected to complete early this month.
The tight-lipped insiders noted that out of the amount, GH¢ 90 million would expect this year and the remainder by 2014.
The Business Chronicle, however, is not clear whether the purchase transaction will treat Merchant Bank's huge unpaid loans portfolio on its balance sheet. This was one of the issues that brought the Merchant Bank and First Rand Bank takeover deal into an abrupt end.
Announcing the abrogation of the Merchant Bank and First Rand Bank deal in July this year, SSNIT, the state-owned pension giant, which owns 75 percent of Merchant Bank Ghana said that the two parties, namely First Rand and Merchant Bank, failed to reach an agreement on the commercial principles for the acquisition.
The Corporate Affairs Director for SSNIT, Ms Evangeline Amegashie in a press release stated:"FirstRand Limited (FirstRand) of South Africa and Ghana's Social Security and National Insurance Trust (SSNIT) jointly announced that the original legal and regulatory time frame agreed for FirstRand's offer to acquire Merchant Bank Ghana (MBG), announced in August 2012, has officially lapsed".
It went further to say that despite all reasonable endeavours, the parties were unable to reach an agreement on the commercial principles underlying the transaction and could not procure the fulfillment of all the conditions precedent. Therefore, the transaction cannot be completed and has lapsed.
The released noted: "FirstRand said that it was disappointed not to have concluded the transaction, however, Ghana remains a priority country for expansion and the Group would continue to engage with SSNIT on its new process".
It could be recalled that in August, last year, FirstRand Bank of South Africa made a bid of $91 million for a 75 percent stake in the Ghanaian bank. The takeover, if completed, should have positioned the bank among the five largest in terms of assets in Ghana.
But the deal was put on hold due to difficulties among shareholders on clearing of outstanding bad debts on the books of Merchant Bank.
Currently, Merchant Bank operates 22 branches across the country. Although many Ghanaians had have raised concerns over the deal, workers of the bank completely supported the takeover bid.
They were convinced that the First Rand Bank deal would help turn fortunes of the bank around and bring returns for shareholders.