SEC Approves NIPCO Mandatory Purchase Of Mobil Oil Shares

. . . Mobil shareholders offered 68% premium
LAGOS, (Sundiata Finance) – The Nigerian Securities and Exchange Commission (SEC) has approved the mandatory acquisition of 3 per cent equity stake held by qualifying minority shareholders of Mobil Oil Nigeria Plc (Mobil) by NIPCO Investments Limited (NIPCO). Qualifying shareholders are expected to sell close to 12 million ordinary shares of Mobil for N4.86 billion not later than June 29 2017 by filling and signing an acceptance form.
“Qualifying shareholders refer to all minority shareholders of Mobil Oil Nigeria Plc, excluding NIPCO Investments Limited and NIPCO PLC whose names appear in the register as at the Qualification Date, April 10th 2017,” said an approval notice released on June 23 2017 by Cordros Capital, one of the financial advisers to NIPCO. Zenith Capital is the lead financial adviser to NIPCO on the transaction. The mandatory takeover Bid opened with a document dated May 30 2017, seeks to buy 3.23 per cent of Mobil’s issued and paid up capital not currently held by Nipco. NIPCO’s bid price of N417.12, the same price it paid Exxon for its 60 per cent stake, means a premium of 68.19 per cent on each Mobil share. Mobil’s price stood at N248 when trading closed at the NSE on Friday last week, a decline of 1.16 per cent from its N250.9 closing price the previous week. Lafarge Africa gave a premium of 23.71 per cent to shareholders of Ashaka Cement on December 10 2014, when it made a mandatory offer to Shareholders of for 41.39 per cent equity stake in the target. Lafarge offered 57 of its ordinary shares for every 202 ordinary shares of Ashaka, in addition to additional N2.00 for each ordinary bought. Ashaka Cement closed at N24.60 as at the end of trading at NSE on the date the tender offer began; Lafarge WAPCO closed at N76.20. If minority shareholders comply fully with the bid, NIPCO’s stake in Mobil will rise to 70 per cent.
According to the bid document, the concerned shareholders are required to submit the acceptance forms to GTL Registrars within the acceptance period.
NIPCO had successfully bought 60 per cent of Mobil from oil giants, Exxon Mobil Oil Corporation, in a share sale and purchase agreement signed on the floor of The Nigerian Stock Exchange on March 31 2017. The deal is one of the biggest in the downstream sector in recent years, with value estimated at around N90 billion. The Nigerian petroleum trader subsequently applied to SEC for approval to compulsorily buy the remaining Mobil equity from the minority holders as required by section 131(1)(a) of the Investment & Securities Act (No. 29 of 2007) and Rule 445 of the Securities & Exchange Commission’s Rules & Regulations. “I have been advising my clients to accept the tender offer because of the immediate gains it will provide for them,” said a stockbroker over the weekend. “Minority shareholders can subsequently buy shares from the Exchange at much lower price if they so wish.”

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