The news of the intended purchase of Union Bank by Access Bank or Zenith Bank is the current trending news on the floor of the Nigerian Stock Exchange.
The 3 banks in the news continue to attract attention on the floor of the Nigerian Stock Exchange. With the bride (Union Bank) leading the grooms in performance yesterday. The two potential grooms, Access Bank and Zenith Bank also grew yesterday. This much was expected for yesterday. Union Bank gained 9.26% to close at a price of N5.90. Of course, it was bullish for Union Bank, but if you are not in Union Bank as the moment, after two more days of straight gains from the floor of the stock exchange, you might need to just relax and see what the possibilities are.
All these we are getting to hear remain rumor. What if it does not happen? Has Union Bank the capacity to sustain the current price level? So you’ve got to be careful. At least to the extent to which charts can reveal, the price of Union Bank is becoming too high. Money flow is however showing higher possibility.
To get the guide and the valuation in case of merger or takeover; that is what the probable price would be. It will still be a point of discussion.
We should not just expect that the intending groups will buy at any frivolous price. And so because of that, if the price gets to N10, they will have to but at N10 or N12; it won’t work like that. There must be a basis of valuation.
The market seems to be behaving like Zenith will most likely grab the Union Bank deal as Zenith Bank’s share price got a compensation of 3.60% yesterday. The current Governor of CBN was until his movement to CBN a staff of Zenith Bank. As a matter fact, Emefiele was the Managing Director of the Bank. People expect a measure of loyalty. However in this case, CBN is not the one selling Union Bank. Of course the CBN Governor has a lot of influence, but there are major shareholders also in Union Bank. So that argument that CBN Governor may most likely work in favour of Zenith Bank is defeated.
Jim Ovia is a silent ‘Lion’. He doesn’t talk, yet very strong. That much we can see in the expansion of the bank in the last decade.
Access Bank cannot also be underrated. With Access Bank, I have come to believe in them that nothing is impossible. Don’t forget that Access Bank ones almost took over Union Bank long before Mallam Sanusi Lamido, former CBN Governor sent the Board of the Bank packing. If not for the strength of Godwin Obor, the then Managing Director of the Bank, Union Bank would have long become a part of Access Bank.
Taking a cue from their takeover of Intercontinental Bank, Diamond, Kenya Bank, Botswana to South Africa, you dare not stand in the way of a moving Access Bank.
Access Bank was up by 2.45% yesterday, but looking at the position of charts, Zenith has higher price movement possibilities at least for now
Whoever gets Union Bank, either Access or Zenith would become Nigeria’s most valuable bank. We wait to see how this intrigues play out.