The proposed sale of Union Bank has triggered massive interest in the company’s stock as investors queue to add the lender’s shares in their asset portfolio. This interest has skyrocketed Union Bank’s value within days in the capital market.
Ripples Nigeria had reported Friday that the majority shareholder of Union Bank, Atlas Mara, wanted to sell the company to interested investors in Nigeria and Middle East.
Atlas Mara was reported to be withdrawing its presence in Nigeria and Africa because it misjudged the financial market of the continent, and not impressed with its experience.
Union Bank is its biggest asset in Africa, with the company owning 49.97 percent stake in the Nigerian lender. The foreign investment company owned by Bob Diamond reportedly received bids from Access Bank and Zenith Bank.
Shareholders are smiling to the bank
While analyst believed that the proposed sale will negatively impact the identity of Union Bank in the capital market, the reverse has been the case, as stock investors are delighted to make their entry into the creditor as Atlas Mara prepares its exit.
This interest pushed Union Bank’s stock value to N5.9kobo per share on Monday from Thursday’s N4.95kobo per share – within the two days of the proposed sale, Union Bank stock gained N0.95kobo.
Prior to the sales report, the stock price had been trading flat with demand for shares limited at six figures. But since May 6, volume of shares have risen to millions; from 191,357 shares to 4.34 million shares today.
As investors increase their demand for the lender’s stock, some shareholders are engaging in profit-taking to take advantage of the surge in interest for Union Bank shares.
This shows the proposed exit of Atlas Mara has a positive outcome on Union Bank. It is not known when the majority shareholder will exit, but the prospective buyers seem to have boosted investors’ confidence towards Union Bank.
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