Cornerstone Insurance tries another marriage after failed attempt

Chuks Udo Okonta

Cornerstone Insurance Plc is contemplating another merger proposal with Fin Insurance, few months after its botched merger talk with Linkage Assurance Plc, Inspen has learnt.

Though, its Managing Director Ganiyu Musa, could not confirm the merger plan, due to what he termed regulatory reasons, he said the company would be willing to merge if it sees acceptable opportunities, that are legal.  

He said: “Because we are a quoted company, there are certain things we are not allowed to say publicly, if we have not made any statement to that effect at the appropriate place. Having said that let me say that as a company, we believe the industry is fragmented.

“There are a number of us operating as marginal players, so we believe that consolidation is not only desirable, we actually think it is inevitable. At Cornerstone, if we see acceptable opportunities, we would be willing to go into such a romance, provided it is something that is legal. Unfortunately, that is all I would be able to say at the moment due to regulatory reasons.”

Cornerstone and Linkage Assurance merger talk collapsed due to the sharing formula which was put at 30:70 per cent in favour of Cornerstone.

 During the 2012 Annual General Meeting (AGM) of Linkage Assurance in Lagos, shareholders asked the company’s board to discontinue the merger, insisting that if the company intends to merge with another firm, it should not be Cornerstone.

Speaking at the AGM, a shareholder, Nona Awo, threatened that shareholders would not allow the company’s board to rail-road them into a merger arrangement of 30:70 in favour of Cornerstone. He added that minority shareholders would definitely move against it.

In the same vein, President of the Nigerian Shareholders Solidarity Association (NSSA), Timothy Adesiyan, said: “We are not against merger of the company if the need arises but definitely, we will not merge with a Cornerstone.”

Managing Director Linkage, Godwin Wiggle, explaining why the merger with Cornerstone did not work; said the numbers which is the reason for the merger did not add up. He added that one of its shareholders increased its holdings from 17 per cent to about 53 per cent by injecting about 1.4billion into the company.

 “The indices of what propelled the merger in the first place suddenly did not add up and we just felt there was no reason for it to continue.

“Also the shareholders have the final say and because they believe their interest was not been considered, we had to respect their view by ending the merger. Presently we are building the company,” he said.