The market capitalisation of Nigerian Stock Exchange (NSE) was reduced by N65.321 billion yesterday following the delisting of the shares of Seven-Up Bottling Company (SBC) Plc.
The shares of SBC were delisted by NSE six years after its main rival, Nigerian Bottling Company(NBC) Plc was delisted from the Nigerian bourse.
The NSE had last month approved the voluntary delisting of SBC after receiving a takeover bid from its majority shareholder, Affelka S.A aimed at restructuring the soft drinks bottler. The majority shareholder made the takeover proposal last August after the company posted losses.
Affelka held 73 per cent of the equity of SBC before it offered to completely buyout minority shares in SBC for a consideration of N112.70 per share.
While the company received a “no objection” from the Securities and Exchange Commission (SEC), the minority shareholders were expected to approve the proposal on January 11, 2018. However, few days before court-ordered meeting, Affelka raised the offer price for the acquisition of the outstanding 171,542,574 to N125. The new offer price represented a premium most of the shareholders could not resist.
Consequently, the Affelka had its way and bought out the minority shareholders. Under the scheme, shareholders were to be paid cash consideration of N125 per share as modified at the court ordered meeting.
According to the scheme “ share certificates representing the interest of the holders of the shares shall cease to be valid and that the scheme shares previously held in demutualised form shall be expunged from the respective record of the company’s shareholders maintained by the Central Securities Clearing System, CSCS. Also, upon the scheme becoming effective, the ordinary shares of the petitioner be delisted from the Daily Official List of the NSE ; or such incidental , consequential and /or supplementary orders as are necessary to ensure that the scheme be fully and effectively implemented.”
Investment analysts at Afrinvest West Africa, had advised minority the shareholders of SBC to accept the tender offer from Affelka.
According to Afrinvest, given the recent weak financial performance, historical illiquidity characterising SBC’s stock – which will possibly worsen post-acquisition – and the premium offered by Affelka relative to the current market price, they recommended investors tender their shares for the price consideration.
Meanwhile, the Nigerian bourse opened the week on a negative note as the NSE All Share Index (ASI) depreciated by 0.26 per cent to close at 43,056.51.