Should Scotia Group Jamaica shareholders demand more than $61.50 per share in delisting exercise?

The news that Scotia Group Jamaica will be making a move to delist from the Jamaica Stock Exchange has drawn much discussion.

With the local equities market in the doldrums, the country’s most stable financial institution, which has been in Jamaica for 137 years, will walk away from the JSE, which, back in 2018, Bloomberg hailed as the best bourse in the world.

The JSE will not cry too much as it stands to make a fortune from fees from this transaction.

In recent years, many of Canada’s large banking houses have taken the decision to reduce their presence in the Caribbean, as has RBC, CIBC and Scotia.

Scotia Caribbean Holdings Limited holds 71.78 per cent of Scotia Group Jamaica’s issued shares and has made it clear that the purchase price of $61.50 per share represents a premium of approximately 13 per cent to the 30-day volume-weighted average trading price of the Scotia Group Jamaica shares on the JSE.

Shareholders will have the option to receive payment in either Jamaican dollars or United States dollars in cash.

Scotia’s parent declared that the transaction is aimed at enhancing capital and operational efficiency and Scotiabank’s agility in responding to market opportunities. It insists there will be no material impact on the current operations of Scotia Group Jamaica. The management team, comprised mainly of Jamaicans, will remain, and it will continue to inform the public on its performance. It doesn’t anticipate any major upheaval

Scotia Group Jamaica’s stock price has been undervalued for years. It should be somewhere in excess of $100. It is currently trading at $58.43 with a dividend yield of 3.18 per cent.

On news of Scotia Group Jamaica delisting, the stock price increased, and the volume traded jumped significantly.

There is a view that what Scotia is offering is paltry. As it stands now, the P/E ratio is way less than ten per cent. At $80, the Scotia Jamaica share price would have a P/E of 12.50, at $100 it would be 15.62 per cent and at $150 it would be 23.05.

Scotia now stands to rake in all the profits and get the dividend yield.

For Q2, 2026, Scotia Group Jamaica announced profits of J$10.1 billion and will be paying a dividend of 45 cents.

Speaking at a media briefing on Friday, Scotia Group Jamaica’s CEO Audrey Tugwell Henry explained that “ this transaction is aimed at enhancing capital and operational efficiency and Scotia’s agility in responding to market opportunities. We remain fully committed to supporting our clients, communities and the country’s national development.”

Analysts and commentators note that Scotia Group Jamaica’s profits continue to rise but the free cash flow has dropped precipitously since 2022.

Was this an issue that contributed to Scotia Jamaica going private?

“Absolutely not. We are a financial fortress. We have gone through many cycles in Jamaica, and we are financially strong. Our Q2 results of $10.1 billion in profits on the back of a Category 5 hurricane reflect that we are very clear about our strategy. It reflects that we are clear about how we manage the risk to the business. When you look at the growth of our loan book by 17 per cent, you see the decision to go private is the complete opposite of that assertion. It reflects the confidence the parent bank has in this business in Jamaica, and their intention to continue investing in Jamaica is a fact. We will continue to release our results and share our strategies.

“The shift in cash flows does not reflect any part of this decision-it’s quite the opposite in fact.”

The Scotia Group Jamaica boss added that the Bank of Jamaica has not raised any concerns about the transaction.

The Canadian financial services behemoth has said that going forward, its order of priority is Canada, USA, Mexico and then the English-speaking Caribbean. 

Scotia Group Jamaica’s CEO continued: “This transaction represents a Cdn$500 million direct investment into the economy. We believe, given our strength as a financial services group, we will be able to help our shareholders to look at other deployments and other opportunities for the liquidity that will come their way. We are confident we can do that. Our parents’ shares are traded on both the Toronto and U.S. stock exchanges, so there are many opportunities for further investments.

The injection of capital is going to be very positive for Jamaica, and the timing here is very appropriate.”