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Polaris Bank Sale: Fairview Failed to Submit Binding Offer, Says CBN

The Central Bank of Nigeria has declared that Fairview Acquisition Partners did not submit a binding purchase offer for Polaris Bank contrary to allegations levelled against the handling of the transaction by an online publication, not Interfacenewshub.com. 

This is among the clarifications made Wednesday in a statement signed by the apex bank’s Director of Corporate Communications, Osita Nwanisobi, in which it responded to several issues raised by the online publication. 

Describing the claims as false, Nwanisobi said the Apex bank was constrained to correct the inaccuracies in view of “its potentially grave implications for stability of the Bank, financial sector and the Nigerian economy.  

According to Nwanisobi, Fairview despite making an offer which would have translated to a substantial loss to the Federal Government was still invited by the Committee to participate in the first stage of the process –Non Disclosure Agreement, an invitation which it failed to honour as it “neither executed nor returned the NDA despite verbally confirming receipt of the agreement”.  

He stated that the divestment process from the bank by the Federal Government was supervised by a Committee which comprised senior officials of the CBN and the Asset Management Company of Nigeria (AMCON), as well as reputable legal and financial advisers. 

The statement stressed that no other party made a higher purchase offer than Strategic Capital Investment Limited (SCIL) which eventually won the bid contrary to the false claims made by the publication.

Continuing, he stated that SCIL emerged as preferred bidder because apart from making the highest financial offer for the bank, its technical / financial purchase proposal was the most comprehensive while its growth plans was adjudged the best. At no time did any other party make a higher purchase offer as falsely claimed by the online 

“At no time did any other party make a higher purchase offer as falsely claimed by the online publication. The entity in question, Fairview Acquisition Partners, had indicated an interest in acquiring two banks, including Polaris Bank, for a total sum of N1.2 trillion, an indicative offer which significantly discounted the existing N1.305 trillion debt owed by Polaris Bank to AMCON and so represented a material loss to the Federal Government. Notwithstanding, along with twenty-four (24) other parties, Fairview Acquisition Partners was invited by the financial advisors to participate in the sale process via the execution of a Non-Disclosure Agreement (NDA), the first stage of the process. The financial advisors informed the Committee that Fairview Acquisition Partners neither executed nor returned the NDA despite verbally confirming receipt of the agreement and after follow-up from the financial advisors.Therefore, Fairview Acquisition Partners did not take the opportunity to update their offer by participating in the divestment process and thus did not make a binding purchase offer for Polaris Bank.

“The divestment was executed based on the relevant laws, global best practices for bank resolutions, and requisite regulatory approvals. The Committee, along with its legal and financial advisers, conducted a rigorous technical and financial evaluation of the purchase proposals, assessing promoters’ fitness and propriety, offer price received vs. reserve price, funding structure and financial capacity, strategy and growth plans, amongst others.

“Following evaluation, the promoters of the strategic purpose vehicle, SCIL, emerged as the preferred purchaser, having presented the most comprehensive technical/financial purchase proposal and the highest-rated growth plans for Polaris Bank. In addition to passing all fitness and propriety tests, the promoters also made the highest financial offer for the bank, which was significantly above its core valuation and reserve price.

“SCIL’s binding offer involved an immediate upfront consideration of N50 billion and full responsibility for the debt of N1.305 trillion owed to AMCON, essentially a total purchase consideration of N1.355 trillion. This offer was the most competitive and provided taxpayers and the Federal Government with more than full recovery of its intervention cost. By the sale, the CBN and Federal Government achieved a successful, value-driven resolution of a strategic financial institution.

The apex bank assured the public that it remains committed to promoting a safe and sound financial system in the country.

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