Linda Hutchinson-Jafar, Business Writer

A RBTT banking machine in Kingston. Shareholders on Tuesday approved the sale of the retail banking operations of RBTT Financial Holdings to Royal Bank of Canada. - File

Exceeding expectations, shareholders of Trinidad-based RBTT Financial Holdings Limited on Wednesday gave a 98 per cent endorsement to the US$2.2 billion offer from Royal Bank of Canada that will merge the regional banking operations of the two companies.

The deal had been contingent on at least 75 per cent approval from RBTT shareholders.

The vote was heavily influenced by large institutions such as Guardian Holdings Limited and the state agency, the National Insurance Board, which voted for the takeover at Tuesday's special shareholders' meeting held at the Hilton Trinidad in St Ann's.

The NIB owns 22 per cent of RBTT, and Guardian 12 per cent.

Return of RBC

The vote signals the return of RBC to Trinidad and Tobago and Jamaica, markets the Canadian bank had given up two decades ago.

The company is expected to rebrand the RBTT banks under the Royal Bank logo.

Once the operations are amalgamated, RBTT Financial Holdings Limited and RBC Holdings (Trinidad & Tobago) Limited, a subsidiary created by RBC to effect the deal, will also combine and continue as a wholly owned indirect subsidiary of RBC.

RBC will pay cash of TT$24 per share to RBTT shareholders, while the remaining 40 per cent is to be paid in RBC shares, representing another TT$15 to TT$16 per share.

The RBC stock on Thursday was trading at US$46 per share.

Historic decision

"This is a historic decision, which will benefit all stakeholders. We now move to satisfy the requisite regulatory requirements to ensure that we can close this transaction within the shortest possible time-frame," said RBTT Group chairman Peter July.

The transaction is expected to close in May or June, subject to regulatory approvals.

RBC has said that no jobs will be lost through the proposed amalgamation of the two companies.

The transaction will create one of the most expansive banking networks in the Caribbean across 18 countries.

With more than US$13.7 billion in assets, the combined operations will have 130 branches, with close to 7,000 employees serving more than 1.6 million clients.

A number of small shareholders has expressed disapproval of the deal.

"Ordinary shareholders saw through all the smoke screens that this is not an amalgamation nor partnership, but a straight takeover by RBC," said president of the Federation of Independent Trade Unions and NGOs, David Abdullah.

"Regardless of how the vote is, I believe that a victory has been won by ordinary people of society who have stood up and said no to those who are holding power and using that power for their naked self-interest."

He said government supported the sale because the pension plans of state companies, including Petrotrin, Trinidad and Tobago Electricity Company, Telecommunication Services of Trinidad and Tobago and National Petroleum, hold more than 11 per cent of RBTT shares.

Minority shareholder Peter Permell said that shareholders should have been given a 100 per cent cash back deal but that some ordinary shareholders were not well informed about the details of the deal and could not effectively comment on it.

business@gleanerjm.com