RBC to Buy RBTT for $2.2bn

Following rumors of a deal, Royal Bank of Canada has announced a $2.2bn acquisition of RBTT Financial Group. RBTT’s board has approved the transaction, worth TTD13.8bn, and shareholders will vote on the TTD40 per share offer, paid in cash (60%) and RBC shares (40%). The combined entity will boast $13.7bn in assets and 130 branches in 18 Caribbean countries and territories. RBTT had been in discussions with potential buyers since April and suitors include Canadian rivals Scotiabank and CIBC, through its FirstCaribbean unit. RBC says the offer represents an 18% premium on the closing price of RBTT shares September 28, as well as a 27% premium to the average share price of TTD31.44 over the last 12 months. The transaction is expected to close by mid-2008 and the merged entity will be headquartered in Port of Spain. “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,” says Peter Armenio, RBC’s head of US & International Banking. Credit Suisse was the advisor to RBTT and had been working with the institution for a while. Merrill Lynch was hired to give RBTT a fairness opinion.