SCOTIA Group Jamaica’s majority shareholder has raised its offer to buy out minority investors to $75 per share from $61.50, increasing the proposed payout by almost 22 per cent ahead of next week’s vote on taking the banking group
private.

The revised offer adds $13.50 for each share held by minority investors. A shareholder with 1,000 shares would receive $75,000 if the transaction is completed, compared with $61,500 under the previous offer.

Scotia Group said Tuesday that the increase followed an improved proposal from Scotiabank Caribbean Holdings Limited, its majority owner, after the Jamaican group delivered strong second- and third-quarter results.

The companies have amended their June 11 arrangement agreement to reflect the higher price. The other terms and conditions remain unchanged, as does the October 7 date for shareholders to vote on the transaction.

The increased offer also comes with support from some large institutional shareholders. Scotia Group said investors collectively holding 21.12 per cent of the minority shareholding have entered into voting support arrangements in favour of the transaction at the revised price.

But that support does not secure approval on its own. The scheme requires a majority in number of minority shareholders present and voting to support it, with those voting in favour also representing at least 75 per cent of the value of the minority shares voted.

The proposed privatisation would buy out the shares held by minority investors, ending their ownership interest in the group in exchange for cash.

Scotia Group said the $75 offer represents a premium of approximately 27 per cent to its closing share price on September 28, the last trading day before the increase was announced.

It is also approximately 38 per cent above the stock’s average trading price over the 30 trading days up to June 11, weighted by the number of shares traded at each price. That benchmark predates the original announcement of the privatisation.

The premiums show how much more shareholders would receive under the offer than at those market prices. The increase from the original $61.50 offer itself is approximately 22 per cent.

“The improved offer represents a significant increase in value for minority shareholders. At J$75.00 per share, we are providing an attractive premium and a compelling opportunity for shareholders to realise immediate and certain value for their investment,” said Jabar Singh, Scotiabank president for the Dominican Republic and the Caribbean.

“Our decision to deepen our investment underscores our confidence in Scotia Group Jamaica and our commitment to our employees and clients,” Singh added.