Spring Bank Acquisition Springs Into Murky Waters.

Byline: Lucky Fiakpa

Bank PHB acquisition bid of Spring Bank was seen as a done deal when it announced that it had successfully completed its mandatory bid for the acquisition of over three billion shares of the bank and a new board constituted almost immediately following approval from the CBN until a group of aggrieved shareholders came with an injunction attempting to halt the process, Lucky Fiakpa writes

The acquisition process of Spring Bank by Bank PHB may well move from the boardroom to the courtroom for final settlement of the various issues veiling it at the moment. Bank PHB a fortnight ago announced cheerfully that it had successfully completed its mandatory bid for the acquisition of over three billion shares of Spring Bank.

But some aggrieved shareholders of Spring Bank Plc, who claim that Bank PHB did not meet the statutory requirements to make the so-called "mandatory bid" advertised on Monday, December 1, 2008 where it sought to acquire majority shareholding in the Bank last week secured an injunction at a Federal High Court, sitting in Abuja against Bank PHB's purported takeover of Spring Bank Plc. Also affected by the injunction are Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC), Nigeria Stock Exchange (NSE), First Registrars Limited and the Interim Management Board (IMB), whose tenure is expected to come to a close on December 31 2008.

While Bank PHB claimed in the mandatory bid that they had acquired about 33 per cent stake in Spring Bank Plc, the shareholders argue that included in the basket of shares were the highly contentious "rejected shares" and "warehoused shares", both of which amount to almost 20 per cent of the Bank.

The shareholders argue that the "mandatory bid" was undertaken in disregard of the provisions of the law guiding acquisitions, a trend that had come to be associated with the tactics thus far adopted by Bank PHB also believed to be working in concert with the regulatory agencies, especially SEC and CBN.

The "rejected shares" had been a subject of many petitions since 2006. It relates to the …