Scotiabank Jamaica’s decision to go private could unleash one of the biggest cash injections the Jamaican stock market has seen in years.  The question now is: where will all that money go?

Scotiabank Jamaica’s parent company wants to buy out minority shareholders for $61.50 per share and delist the company from the Jamaica Stock Exchange.

The deal would cost roughly J$54 billion.

And according to Taking Stock analyst David Rose, that’s where things get interesting.

“You’re talking about $54 billion Jamaican dollars with that being paid by either Jamaican or US dollars. So you’re potentially talking about $339-$340 million US coming into the Jamaican economy directly going into several different asset classes.”

-David Rose

Taking Stock Analyst

In other words, investors who accept the offer will suddenly have billions of dollars to reinvest.

Some could move into other stocks.

Others may choose bonds, real estate or foreign investments.

And that’s significant because Scotia is no ordinary company.

With a market capitalization of roughly J$184 billion, it’s currently the largest company listed on the Jamaica Stock Exchange.

The proposed offer has also sparked debate over whether shareholders are being adequately compensated.

The offer represents a premium to the recent trading price, but some investors argue it may not fully reflect the value of a company that has long been considered one of Jamaica’s most reliable dividend stocks.

“It may not seem sufficient if you’re thinking you’re holding this in your portfolio and you’re planning to have it for probably another five, ten years in your portfolio just providing you with dividend income.”

-Jodian Aris,

Sagicor Investments

The debate comes as Canadian banks continue to rethink their Caribbean operations.

Scotiabank has already sold businesses in several Caribbean and Latin American markets over the past few years, while CIBC recently announced plans to sell its Caribbean operations to Butterfield.

So while the headlines have focused on Scotia leaving the stock market, the bigger story may be what investors do next.

Because J$54 billion looking for a new home could have a major impact on the Jamaica Stock Exchange and other asset classes for months to come.

And that’s the Bottom Line.

So if you owned Scotia shares and receive the cash payout, where would you reinvest it? Stocks, bonds, real estate or US investments?