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Carlyle on verge of Butterfield exit

Butterfield Bank's biggest shareholder, The Carlyle Group, is a step closer to exiting its position with the bank.

A public secondary offering of common shares in the bank, including an additional offering to the underwriters, includes all 7.6 million of the stock owned by Carlyle.

It had always been expected Carlyle would move on after between five and seven years as a major shareholder. It was one of the key investors that put $550 million into the bank as part of a recapitalisation programme in 2010.

That move helped the Bermudian bank overcome difficulties it faced after it lost millions of dollars as a result of the US subprime meltdown.

Last September, Butterfield joined the New York Stock Exchange after a successful initial public offering. The listing has given the bank's stock greater liquidity.

US-based Carlyle Group is one of the world's largest investment firms, with about $170 billion of assets under management. It has a 14.3 per cent stake in Butterfield.

After the close of the markets on Wednesday, Butterfield announced the launch of the secondary offering.

The bank will not receive any of the proceeds of the sale as the offering is from a group of major shareholders.

In a statement, the bank said a group of its shareholders, including affiliates of The Carlyle Group, intend to offer 9.55 million common shares in an underwritten public offering.

In addition, the underwriter will be offered a 30-day option to purchase up to an additional 1.4 million shares at the public offering price, less underwriting discounts and commissions.

The shares offered will include all 7.6 million common shares owned by Carlyle.

Butterfield will not be issuing any shares in connection with the offering.

Goldman Sachs & Co, Citigroup, Sandler O'Neill & Partners, and Keefe, Bruyette & Woods are acting as the joint book-running managers. Raymond James and Wells Fargo Securities are acting as co-managers for the offering.

The pricing and completion of the offering remain subject to a range of conditions.

The bank's share price has gained nearly 40 per cent since last year's IPO. On Wednesday, the shares fell eight cents in New York to close on $32.93.

Disclosure: the writer of this article owns shares in Butterfield Bank

Changing times: a public secondary offering of common shares in Butterfield Bank will include all those owned by The Carlyle Group, the bank's largest shareholder

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Published February 22, 2017 at 12:00 am (Updated February 21, 2017 at 7:53 pm)

Carlyle on verge of Butterfield exit

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