(CMR) Cayman Marl Road has received exclusive information that Cayman National Corporation has received a new offer to purchase the entity by a North American led syndicated group.
This could very well lead to a bidding war for the only Caymanian bank.
Our sources indicate that the top managing directors; Stuart Dack and General Legal Counsel, Ian Whan Tong received a hand delivered offer last week Wednesday at 3:30 pm on the second floor of their Elgin Avenue headquarters.
The offer appears to be significantly enriched compared to what Republic Bank Trinidad and Tobago (Barbados) Limited (RBTTBL) offered in August 2018 by at least USD $50 million.
Our sources have further indicated that the entity is a new private equity syndicated group of both North American and Caymanian partners. The seriousness of this new offer should not be underestimated as we are reliably informed they have already received local legal counsel who are involved in the process.
Furthermore, our legal advisers indicate that should this offer be ignored the directors could be taken to task for breaching their fiduciary duty to the shareholders. The board has a legal obligation to present the offer for consideration. Our legal adviser (who is not related to this offer) noted from his experience that:
“the proper legal steps to take here would be to call a special extraordinary general meeting of at least 20% of the shareholders. Ultimately the decision lies with them; but it has to be presented.”
They indicated that removal of the majority of the executive committee and general counsel could be a real possibility if this is not done. We have been informed that when CNB was incorporated CIMA did not yet exist and the decision to allow foreign ownership lies with the Governor in Council and there is a requirement to advertise in order to supersede the LCCL which has not been done.
Since announcing that they have received an offer from a regional bank Cayman National has been inundated with criticism for making the move. The trumpet of discord has grown even louder since the removal of popular President, Ormond Williams two weeks ago.
After CMR broke the story of his removal an emergency staff meeting was held the following morning. CNB staff were promised a sizable Christmas bonus and told that the bank had made over $20 million in profits last fiscal year and they would be rewarded accordingly.
However, just Friday CMR has already started to received unconfirmed reports of other staff redundancies and packages to be offered to long serving employees.
There's a general fear of a mass exodus of customers who are not keen on a regional entity acquiring the bank. In fact, one competing bank executive noted that a large number of CNB's business clients had been in contact with them to inquire about moving their business elsewhere.
Other sources have concerns about the acquiring entity and their “questionable” business connections. The United State State Department has issued advisories about Trinidad links to terrorists groups. Others have claimed that an offer from a jurisdiction that’s has equivalent legislation as it relates to AML/CFT requirements would be beneficial. It does appears that this Trinidad entity had regulatory struggles previously and there was some government oversight of related/parent entities.
The directors have remained mum thus far on the new offer but we understand that Mr. Dack has left the jurisdiction shortly after receiving the offer and was in the United Kingdom the following day.