Sunday 17 November, 2019

JMMB seeks to raise over $10 billion from latest share offer

JMMB Group CEO Keith Duncan

JMMB Group CEO Keith Duncan

JMMB Group hopes to secure at least $10 billion in capital to acquire a majority stake in regional insurance provider, Sagicor Financial from its additional share offer which opens next Tuesday, October 22.

JMMB will offer an additional 266 737,797 ordinary shares at $38 to JMMB shareholders and $38.75 for non-existing shareholders.

The shares will be apportioned between key investors: 150,000,000; existing shareholders: 80,000,000; and non-reserved share applicants: 36,737,797.

The offer closes on November 7 with a minimum purchase of 300 new ordinary shares. JMMB, however, has the option to upsize the share offer to 325 million, ultimately increasing shareholding in the company by 20 per cent.

JMMB’s offer of the shares in Jamaica will be followed by the opening of the share offer in Trinidad and Tobago on October 25, 2019. The financial institution currently has 1.6 billion units in circulation.

Funds raised from the share offer will be used by JMMB to acquire a US$250 million stake in Sagicor Financial from Canada based Alignvest.

Once acquired, JMMB plans to list the insurance giant on the Toronto Stock Exchange via an existing shell listing for this specific purpose.

“The use of such net proceeds will be consistent with our growth strategy, which includes organic expansion and diversification through investment in other entities, whether by acquisitions or strategic investments. We are confident in our ability to deploy the proceeds of this Invitation into areas that have a strong potential to grow profit materially,” JMMB said.

JMMB noted that it will acquire Sagicor at a discount to its peers including both on a price to earnings and a price to book value. The peers include Sun Life Financial, Great West Life Co, Industrial Alliance and Manulife Insurance. 

JMMB’s acquisition of a US$250 million stake in Sagicor Financial would give the company a 22 per cent stake in Sagicor.

The group chairman Archibald Campbell estimates that the acquisition would increase JMMB’s 2019 earnings from an estimated US$27 million to US$45 million with increases thereafter.

On May 16, 2019, the JMMB Group announced a subscription for an amount between US$200 million and US$250 million in Class B shares of Alignvest Acquisition ll Corporation, a publicly-traded special purpose acquisition corporation listed on the Toronto Stock Exchange for the purposes of completing a qualifying acquisition.

The Class B Shares will be automatically converted into common shares of Alignvest on the closing the acquisition and a single resulting entity “New Sagicor” will be born. SFC is a leading financial services provider in the Eastern Caribbean, Trinidad and Tobago, and Jamaica with growing presence as a provider of life insurance products in the United States.

“This investment is expected to continue to diversify our revenue streams both from a business line and geographic spread perspective and is anticipated to result in a material growth in our profits attributable to ordinary shareholders,” the company said. 

 

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