The Central Bank of Nigeria (CBN) has revealed that Fairview Acquisition Partners undervalued Polaris Bank in their acquisition offer.
The CBN revealed this in a statement reacting to the allegation of bias after selling Polaris Bank to Strategic Capital Investment Limited (SCIL). SCIL is owned by Auwal by Lawan Abdullahi, a son-in-law to the former military head of state, Ibrahim Babangida, at the cost of N1.355 trillion.
The N1.355 trillion was the highest offer received from the 25 companies which offered to acquire Polaris Bank from the central bank and Asset Management Corporation of Nigeria (AMCON).
Nigeria’s financial regulator and AMCON had invested N1.305 trillion in Polaris Bank while trying to revive the company after it went bankrupt while it was known as Skye Bank.
According to the central bank, Fairview offered N1.2 trillion to buy two banks, one of which is Polaris Bank. The CBN said the offer was lower than the amount already invested in Polaris Bank, which is meant to turn to debt recovered through the sale.
Aside from under-pricing Polaris Bank, it was gathered that Fairview also failed to submit the Non-Disclosure Agreement (NDA) given to it.
CBN explained that the NDA was the first stage of the process. The statement reads: “The financial advisors informed the (Divestment) 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 Committee, comprising senior representatives of AMCON and the central bank, supervised the sale to Strategic Capital.