RBC to acquire RBTT
Deal creates new Caribbean banking leader
PORT OF SPAIN/TORONTO, October 2, 2007 — Royal
Bank of Canada (RY on the TSX and NYSE) and the RBTT Financial
Group (RBTT) today jointly announced an agreement to combine
RBC's Caribbean retail banking operations with RBTT's through
the acquisition of RBTT for a total purchase price of TT$13.8
billion (approximately US$2.2 billion at exchange rates as
of September 28, 2007).
Under the agreement, RBTT shareholders will receive per share
consideration of TT$40 (approximately US$6.33 as at September
28 exchange rates) payable in a combination of cash (60%)
and RBC common shares (40%). The number of RBC common shares
received by RBTT shareholders is subject to a plus/minus 10%
"collar" based on an RBC share price of US$54.42
(the average trading price for the five days ending September
28). Further details about the collar mechanism are available
below.
The RBTT Board of Directors approved the deal and unanimously
recommends that RBTT shareholders vote in favour of the transaction.
The transaction will be mutually beneficial for both companies.
It is expected to close by the middle of 2008 and will be
accretive to RBC's earnings per share in 2008. RBC's offer
represents an 18% premium on the closing price of RBTT shares
on September 28, 2007, and a 27% premium to the average share
price of TT$31.44 over the last 12 months.
The transaction will create one of the most expansive banking
networks in the Caribbean, with a presence in 18 countries
and territories across the region. With more than US$13.7
billion in assets, the combined operations will have 130 branches
across the Caribbean, with more than 6900 employees serving
more than 1.6 million clients. RBC's expanded Caribbean retail
banking operations will ultimately be headquartered in Trinidad
and Tobago.
"This is a transformational acquisition for RBC in the
Caribbean, one that extends our reach into many important
markets, notably Trinidad and Tobago, Jamaica, and the Dutch
Caribbean," said Peter Armenio, RBC's head of U.S. &
International Banking. "RBTT provides RBC with extensive
local insight and leadership in markets where we have little
or no presence while significantly advancing our strategy
to grow outside Canada.
"RBTT is a perfect complement to RBC's current footprint,"
Armenio added. "We both share a history of serving customers
throughout the Caribbean and have almost no overlap of our
respective branch networks."
"This historic transaction provides a great opportunity
for both companies" said Peter July, RBTT Group Chairman.
"RBC's financial strength and depth of expertise combined
with RBTT's market knowledge and position in the region provides
the perfect foundation for us to continue growing and competing
effectively within the Caribbean Basin and beyond.
"RBTT shareholders will benefit by having the opportunity
to improve significantly the liquidity of their investment
and own a portion of the largest bank in Canada and a leading
global financial services institution," July added.
"The benefits of this transaction also go well beyond
the shareholders and employees of both companies," July
added. "This transaction sets the stage for Trinidad
and Tobago becoming the financial center of the Caribbean."
The headquarters of RBC's Caribbean retail banking operations
will be located in Port of Spain. "We want our Caribbean
headquarters to be located in what is a key financial center
for the region as well as a logical jumping off place for
potential growth outside the Caribbean," Armenio said.
Senior management from both organizations will be integrated.
Suresh Sookoo, RBTT Group CEO and Ross McDonald, RBC's current
head of Caribbean banking, will share responsibility for leading
a smooth transition. Sookoo will become CEO of RBC's Caribbean
retail banking operations following the successful integration
of the two operations.
"We are excited about the opportunities the transaction
provides clients and employees of both companies," McDonald
said.
"This deal creates a significantly larger organization
that is better positioned to serve all our customers, who
will benefit from the expanded market coverage, the increased
lending capacity of the combined banks and an expanded range
of products," Sookoo added.
The acquisition marks RBC's return to Trinidad and Tobago,
where it had maintained operations from 1902 to 1987. As a
consequence of this proposed transaction, RBC will explore
the possibility of issuing depositary receipts backed by RBC
common shares on the Trinidad and Tobago Stock Exchange. "Making
depositary receipts available in Trinidad and Tobago would
further demonstrate our commitment to the region while giving
local investors a chance to invest in the growth of one of
the best performing financial services companies in the world,"
Armenio said.
RBTT is RBC's second international acquisition in the past
month and the ninth acquisition RBC has announced outside
Canada in the past 12 months. "We are committed to growing
our business outside Canada and we will continue pursuing
suitable opportunities to build on our existing businesses
through organic means as well as acquisitions," Armenio
said.
The deal is subject to closing conditions, including approval
by regulators and RBTT shareholders, and other conditions
described in the information circular to be mailed to RBTT
shareholders.
DEFINITION OF COLLAR MECHANISM
Under the terms of the agreement, RBTT's shareholders will
receive a fixed amount of cash and a number of RBC common
shares for their RBTT shares. The number of RBC common shares
to be received for each RBTT share will be determined by an
exchange ratio. This exchange ratio will be determined by
dividing the U.S. dollar equivalent of TT$16 by a specified
price as follows:
- If the average trading price of RBC common shares on the
NYSE for the five consecutive trading days ending on the
second trading day prior to the closing of the transaction
is between US$48.98 and US$59.86, then the specified price
for determining the exchange ratio will be that average
RBC trading price.
- If that average RBC trading price is equal to or greater
than US$59.86, then the specified price for determining
the exchange ratio will be US$59.86.
- If that average RBC trading price is less than or equal
to US$48.98, then the specified price for determining the
exchange ratio will be US$48.98.
A conference call is scheduled to take place on October 2,
2007, from 10 a.m. to 10:30 a.m. (EDT) and will feature a
presentation by Royal Bank of Canada and RBTT executives on
this announcement. It will be followed by a question and answer
period with analysts. Interested parties can access this call
live on a listen-only basis via telephone at: 416-340-2216
or 1-866-898-9626. Please call between 9:50 a.m. and 9:55
a.m. (EDT).
A recording of the conference call will be available after
5:00 p.m. (EDT) on October 2 until December 28 via telephone
at: 416-695-5800 or 1-800-408-3053, passcode 3238335#.
Information related to this announcement will be available
at: www.rbc.com/investorrelations.
ABOUT RBTT
RBTT is a Caribbean-owned banking and financial services group
which offers a complete range of banking and financial intermediation
services to customers in Trinidad & Tobago and the Caribbean.
The RBTT Financial Group includes ten
commercial banks with branches located throughout the English-speaking
Caribbean, Suriname, the Netherlands Antilles and Aruba. RBTT
has led in pioneering a comprehensive range of innovative
and creative financial services for individual clients, private
and public sector companies, governments and international
investors. These include a full range of local and international
credit cards, sophisticated international financing packages,
trade promotion services and interactive trade financing initiatives.
ABOUT RBC
Royal Bank of Canada (RY on TSX and NYSE) and its subsidiaries
operate under the master brand name of RBC. We are Canada's
largest bank as measured by assets and market capitalization
and one of North America's leading diversified financial services
companies. We provide personal and commercial banking, wealth
management services, insurance, corporate and investment banking
and transaction processing services on a global basis. Our
corporate support team enables business growth with expert
professional advice and state-of-the art processes and technology.
We employ approximately 70,000 full- and part-time employees
who serve more than 15 million personal, business, public
sector and institutional clients throughout offices in North
America and 34 countries around the world. For more information,
please visit www.rbc.com.
Royal Bank of Canada has a longstanding
presence in The Bahamas, with operations dating back to 1908.
Today, it boasts a retail network of 28 branches throughout
New Providence and the Family Islands, a commercial banking
business centre, and 37 automated banking machines.
Royal Bank of Canada currently operates
46 branches and 68 automated banking machines in nine Caribbean
countries and territories, with more than 1500 employees across
the region, including The Bahamas.
- 30 -
|
|
| Royal Bank of Canada will combine
its Caribbean retail banking operations with those of
RBTT Financial Group by acquiring RBTT for approximately
US$2.2 billion. Left to right:- Suresh Sookoo, Group CEO,
RBTT Financial Holdings Limited; Peter J. July, Group
Chairman, RBTT Financial Holdings Limited; Peter Armenio,
Head, US & International Banking, RBC; Ross McDonald,
Head, Caribbean Banking, RBC. [download
hi-res jpg, 2MB] |
Media Contacts:
RBC
Nassau
Jan Knowles, (242) 356-8796, jan.knowles@rbc.com
Toronto
Beja Rodeck, (416) 974-5506, Toll-free 1-888-880-2173, beja.rodeck@rbc.com
RBTT Financial Group
Port of Spain
Paul Charles, (868) 623-1322 ext. 2449, paul.charles@tt.rbtt.com
Investor contacts:
RBC
Marcia Moffat, (416) 955-7803, marcia.moffat@rbc.com
Amy Cairncross, (416) 955-7809, amy.cairncross@rbc.com
For general investor relations information please visit: www.rbc.com/investorrelations.
RBTT
Paul Charles, (868) 623-1322 Ext. 2449, paul.charles@tt.rbtt.com
Mary Siu Butt, (868) 623-1322 Ext. 2406, mary.siubutt@tt.rbtt.com
Safe Harbor Regarding Forward-Looking Statements
Certain statements contained in this press
release may be deemed to be forward-looking statements under
certain securities laws, including the "safe harbor"
provisions of the United States Private Securities Litigation
Reform Act of 1995 and in any applicable Canadian securities
legislation, and Royal Bank of Canada (RBC) and RBTT Financial
Holdings Ltd. (RBTT) intend that such forward-looking statements
be subject to the safe-harbor created thereby. The words "may,"
"could," "should," "would,"
"suspect," "outlook," "believe,"
"plan," "strategy," "opportunity,"
"anticipate," "estimate," "expect,"
"intend," "forecast," "objective"
and words and expressions of similar import are intended to
identify forward-looking statements.
By their very nature, forward-looking
statements involve numerous assumptions, and inherent risks
and uncertainties, both general and specific, and risks exist
that predictions, forecasts, projections and other forward-looking
statements, including statements about the acquisition of
RBTT by RBC, and the potential issuance of the deposit receipts,
will not be achieved. We caution readers not to place undue
reliance on these statements as a number of important factors
could cause our actual results to differ materially from the
beliefs, plans, objectives, expectations, anticipations, estimates
and intentions expressed in such forward-looking statements.
These factors include, but are not limited to the possibility
that the proposed acquisition does not close when expected
or at all because required regulatory, shareholder or other
approvals are not received or other conditions to the closing
are not satisfied on a timely basis or at all, that RBC and
RBTT may be required to modify the terms and conditions of
the proposed transaction to achieve regulatory or shareholder
approval, or that the anticipated benefits of the transaction
are not realized as a result of such things as the strength
of the economy and competitive factors in the areas where
RBTT does business; the impact of changes in the laws and
regulations regulating financial services and enforcement
thereof (including banking, insurance and securities); judicial
judgments and legal proceedings; RBC's ability to complete
the acquisition of RBTT and to integrate it with RBC successfully;
reputational risks, and other factors that may affect future
results of RBC and RBTT, including changes in trade policies,
timely development and introduction of new products and services,
changes in tax laws, and technological and regulatory changes.
We caution that the foregoing list of important factors is
not exhaustive.
Royal Bank of Canada and RBTT assume no
obligation to update the forward-looking statements contained
in this press release.
|
