Unity Bank investors set for 110% premium as merger with Providus nears

Shareholders of Unity Bank Plc could be on track for a significant windfall after the Asset Management Corporation of Nigeria (AMCON) sold its 34 per cent stake in the bank to Providus Bank, unlocking a payout of N3.18 per share ahead of a planned merger.

The landmark deal, worth N6.5 billion, was executed on the Nigerian Exchange (NGX) on Thursday through a crossed transaction involving 4 billion Unity Bank shares at N1.66 each.

Under the merger scheme, Unity Bank shareholders will receive either a cash payment of N3.18 per share or opt for a share swap at a ratio of 17 Unity Bank shares for 18 Providus Bank shares. The cash offer represents more than double Unity’s last trading price of N1.51, delivering a 110 per cent premium to investors who have waited months since the stock was suspended in May 2024.

The September 26 court-ordered shareholders’ meeting will determine final approval of the payout and merger plan. If cleared, Unity Bank will be fully absorbed into Providus, transferring all assets, liabilities, and operations to the Lagos-based lender, which has quickly established itself as a digitally driven bank for Nigeria’s SME and retail sectors.

Unity Bank, last valued at N19.4 billion, had customer deposits of N402 billion and assets of N414 billion in 2024. Providus, by comparison, posted assets of N2.56 trillion and deposits of N1.5 trillion in the same year, highlighting the scale of the enlarged entity.

For Unity Bank’s long-suffering shareholders, the potential payout marks a rare turnaround story in Nigeria’s banking sector, which is currently undergoing forced recapitalisation under the Central Bank of Nigeria. Only 14 lenders have met the capital threshold, with others – like Unity – opting for mergers and acquisitions as a survival path.

If successful, the Providus-Unity deal will create a national retail bank with broader digital reach and stronger capital, while offering Unity investors one of the most generous premiums seen in recent bank takeovers.