An associate company of Eclectic Investment Company has taken a controlling stake in Bermuda Commercial Bank.
Bermuda-listed BCB services the international corporate market and high net worth individuals. BCB lost money last year. the reason given was that it invested shareholders’ funds at the current low US$ interest rates. There is a strategy to address the business model of the bank.
Eclectic owns 25.1% of Permanent Investments which is buying 54.5% of BCB from First Curacao International Bank NV for $38.9m. Eclectic’s share of the purchase price is £6.5m – equivalent to $9.88 a share. It effectively has a 13.7% stake in BCB, which it can swap for its investment in Permanent, plus 75,187 options held separately.
Permanent will make a tender offer for the rest of BCB’s share capital but Eclectic will not be involved in that transaction.
BCB will represent 29% of Eclectic’s gross assets at the end of March 2010.
Eclectic would not have been able to make this investment if it were still a fully listed investment trust. Eclectic transferred from the Main Market to Aim on 24 November 2009.
At 87.5p a share, Eclectic is valued at £15.4m. The net asset value was 108.95p a share at the end of March 2010.
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