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More info on the Access Bank offer.

Check out this Access Bank Powerpoint on their share offer. It seems that they have their acts together.

acccess-share-offer.ppt

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Access Bank’s Share Reconstruction

I must admit, ever since I heard about Access Bank’s stock split late last year, I have been apprehensive about their recent return to the stock market to purchase more shares. But the article below on the ProShare blog provides some explanation on the benefits of the reconstruction. It seems that those who held on to their stock after the adjustment have actually seen an appreciation in their holdings. You can Access Bank Analyst Report. Read the article for yourself:

Pre-reconstruction in October 2006, Access Bank had approximately 13.96 billion shares outstanding and the stock was trading at approximately N3.00k. Upon completion of the 1 for 2 share reconstruction, the total number of outstanding shares decreased to $6.98 billion at an adjusted post reconstruction price of N5.98k.

To illustrate, an investor with 10,000 shares pre-construction, had their holdings adjusted to 5,000 shares, but at exactly the same valuation (See schedule in attached report above). The share reconstruction and the subsequent value of investors’ shares have been confusing to many investors, because the impact of the reverse split on investor’s holdings was not properly explained. Majority of Access Bank’s investors are unhappy about the reverse split and the run up in price prior to the announcement of the secondary offering.

However comparatively, it appears that the share prices of other banks that recently completed their secondary offerings surged shortly before and after the announcement of their intentions to raise new funds from the capital markets.The surge in the prices of these shares might have been an intentional mop up by the institutions, or by smart investors buying shares ahead of the offering to enable them sell into post offering up swing.

However, a review of the value of investors portfolio post reconstruction through the technical suspension by NSE in the trading of Access Bank shares on May 18, 2007, indicate that investors who held on to their shares post reconstruction experienced a significant appreciation in the value of their portfolio.

ILLUSTRATION:An investor with 10,000 shares pre-split at N3 paid N30, 000 (10,000 x 3 = N30, 000) originally for the shares. After the 1 for 2 reverse split, the investor received 5,000 share at N6 still valued at N30, 000 (5,000 shares x N6 = 30,000). If the investor did not sell the 5,000 shares received from the split, the shares are worth N96, 640, a gain of N66, 600 or 222% as of May 18, 2007. Even at the discounted offering price of N14.90, the portfolio gain is N44, 500 or 148.3% post reconstruction as indicated in the schedule in the report above.

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