By Tunde Brown & Ikechukwu Emelike

Skye Bank Plc has paved way for both new and old shareholders to buy into their financial institution, as it has commenced the N50 billion hybrid offer which is to close on the 20th of February 2008.

Skye Bank Plc today opens its offering to the public by way of Public Offer 2,231,599,145 Shares of 50k each at N14 per share and Rights Issue of 1,500,608,958 shares of 50k each at N12.50 per share. According to the offer prospectus, money gotten from the offer would be used to deepen Skye Banks retail infrastructure in Nigeria, strengthen subsidies capital base to support business growth, expand the banks capital network of branches and fund its working capital. The bank last week held its completion board meeting at Oceanview, Lagos, where it unveiled plans to give the public and existing shareholders the chance to share in what has been termed “ its harvest of focus and efficiency”.

The current market price of the Skye Bank shares stands at N17.19k, which automatically allows an immediate capital appreciation of 22.78% on fresh investors and 37.52% of existing shareholders who take up their rights at the current pegged market price. Analysts however believe that looking at the company’s fundamentals in terms of its recent performance and industry position, the current market price remains far below its intrinsic value. This position places the stock at a post-offer advantage, as it is widely believed that the stock will soon reflect its true value upward.

In the first quarter un-audited results released recently, the bank put up a first-rate performance that saw most of its indices leap, as it were, reflecting the touted efficiency the company celebrates. The results showed a profit before tax of N4.1billion, indicative of an increase of 238% when compared with corresponding period in 2006. Gross earnings for the period was N12.5billion up from N8.7billion the previous year, an increase of 45%.

The Bank has recorded an increase of over 300% in share price since the beginning of 2007, as against the industry average increase of 200%. Share price, post consolidation was N3.26 and was capped at N17.19 as a result of the technical suspension placed on the bank’s share in preparation for its share offer.

The offer is coming at a time that the bankers committee, together with the CBN has agreed that henceforth any bank returning to the capital market must compulsorily submit a detailed report of its business plan to support the extra money being raised. “The CBN must certify that such funds are necessary and the bank actually needed such an amount of money to be raised”.

(No Ratings Yet)

 Loading ...

This entry was posted on Monday, January 14th, 2008 at 9:34 pm and is filed under Public Offers, Stock Market News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.