THE board of Access Financial Services Limited (AFS) formally advised the Jamaica Stock Exchange (JSE) that there have been no discussions between itself and Dolla Financial Services Limited for a possible takeover of its holdings.

AFS’s Executive Chairman Marcus James confirmed that the board received a letter on August 11 but denied that any discussions between the companies had been taking place.

“The letter proposed a mutual non-disclosure agreement to be entered into between the parties and the mutual disclosure to the Jamaica Stock Exchange and the market at the appropriate time when terms are agreed. A few minutes after the board received this letter, we were surprised to observe various media reports suggesting that Dolla and Access are in discussions regarding a possible takeover of Access by Dolla. Neither Access nor any of its directors or employees was responsible for the disclosure to the media,” asserted James.

AFS and Dolla are both microcredit firms listed on the Junior Market of the JSE with AFS being the first company to list on the market and Dolla being the latest. The Dolla letter stated that the company wanted to acquire full control of AFS and that the letter was an expression of interest. It went on to highlight that confidential explanatory discussions will allow both firms to formulate transaction terms that will mutually benefit both companies’ shareholders. It also requested that if the majority of the board was not opposed to the expression of interest within five calendar days (August 16), both firms would engage discussions in relation to a mutually acceptable non-disclosure agreement.

James said in his letter that the board had also not received any proposed offer which it could place before shareholders for consideration. James said the company was “mindful of the potential impact that premature disclosures may have on trading in the market and was guided by and would only act in accordance with Rule 505 (12) of the Junior Market Rules and section 6 of the Securities (Take-over and Mergers) Regulations”, which govern the issue.

However, the news of the proposed takeover has materially benefited AFS’s stock price as it rose from $19.21 on Thursday to $28.27 on Monday, a 47 per cent increase. AFS’s stock price traded at a 52-week high of $30.74 on Monday which is the highest the stock price has been since March 3, 2020. This has been the first time that some shareholders who participated in Proven Group Limited’s $32 offer for sale in September 2019 have seen the price that high. Dolla’s stock price is up 16 per cent from $2.81 to $3.25.

While AFS says that it has no proposed offer for consideration, the company’s annual general meeting on September 8 at the Courtleigh Hotel will be a closely monitored event as James’ re-election as a director will be up on the ballot, along with Proven Management’s Charmaine Boyd-Walker. This is the second major development for the AFS founder as he tackles a marriage dissolution/divorce lawsuit in the Broward County Circuit Courts with his estranged wife Julie Thompson-James, who also applied for a freezing order on James’ assets or those held on his behalf.

James is the largest shareholder in AFS through Springhill Holdings Limited with 47.33 per cent interest.

AFS’s consolidated loan book stands at $4.65 billion, while Dolla’s loan book stands at $1.05 billion which leaves them as the largest players in the market.

AFS became the first microcredit company to be licensed under the Micro Credit Act by the Bank of Jamaica on August 1.