The Nation Newspaper

Tag: acquisition

  • Jonathan inspects skill acquisition centre

    Ahead of the inauguration of a skill acquisition centre in his Otuoke home town in Bayelsa State, President Goodluck Jonathan, at the weekend, inspected the centre.

    The Otuoke centre is among the nine skills centres being built in the nine states of the Niger Delta by the Ministry of Niger Delta Affairs.

    Its mandate is to train youths in specialised trades, such as oil and gas, maritime and entertainment industries.

    The President, according to a statement by Mrs. Boloko Mohammed, the Director (Press) in the ministry, expressed satisfaction with the level of work the ministry has done at the centre.

    He restated his administration’s commitment to transforming every nook and cranny of the country through infrastructural and institutional development.

    The statement quoted Jonatha as saying: “I am particularly happy with what I have seen today. In fact, I commend the Ministry of Niger Delta Affairs for a job well done.”

     

     

  • GSK UK may back down from 75% Nigerian acquisition as pressures mount

    GSK UK may back down from 75% Nigerian acquisition as pressures mount

    AS shareholders await the decisive court-ordered extraordinary general meeting tomorrow, there are indications that GlaxoSmithKline United Kingdom (GSK UK) might reconsider its controversial bid to acquire shares held by Nigerian shareholders.

    The bid is intended to increase the foreign controlling equity shraholding in GlaxoSmithKline Consumer Nigeria (GSK Nigeria) Plc from 46.4 per cent to 75 per cent.

    Market sources at the weekend said the foreign majority shareholder has been under mounting pressures from several stakeholders, who consider the acquisition bid as unfair and unjustifiable.

    GSK currently holds majority equity stake of 46.4 per cent in GSK Consumer Nigeria through two wholly- owned subsidiaries. With total current outstanding shares of 956.70 million ordinary shares of 50 kobo each, GSK UK holds 443.91 million shares while, Nigerian institutional and individual investors hold the balance of 512.79 million shares.

    GSK UK initially sought to buy 321.45 million shares out of the shareholdings by Nigerians to increase the foreign core investor’s controlling stake to 80 per cent. In the bid for the 33.6 per cent additional equity stake, GSK UK has offered to pay N48 per share.

    According to the proposal, GSK UK seeks to acquire additional shares of GSK Nigeria on a pro rata basis from existing shareholders through a Scheme of Arrangement, implying that the proportionate percentage will be deducted from all Nigerian shareholders and added to GSK UK.

    Initial protests by Nigerian shareholders forced GSK UK to modify the acquisition target to 75 per cent. Under the revised proposal for 75 per cent equity stake, GSK is pushing to acquire 273.46 million ordinary shares out of the Nigerian shareholders’ holdings to add 28.58 per cent, thereby pushing its post-acquisition holding to 75 per cent.

    However, it retained the offer price of N48 per share, substantially lower than its stock market high of N68 and market price of N55.

    GSK UK meanwhile, needs three-quarter approval of shareholders at the court-ordered meeting to actualise the deal. It has indicated it would use its current 46.4 per cent equity stake as a block vote in support of the deal. The Board of the GSK Nigeria has also indicated it would vote in support of the deal. But only three out of the nine directors own shares in the company, and collectively, the Board’s holding is 1.27 per cent. The Nigerian Chairman of the Board of GSK Nigeria, Chief Olusegun Osunkeye holds 1.2 per cent. These add up to 47.67 per cent in support of the bid.

    Impeccable market sources said GSK UK was taken aback by the overwhelming rejection of the acquisition bid, which it had hinged on its consideration for new significant investment in the Nigerian subsidiary.

    The company abruptly cancelled a parley with protesting Nigerian shareholders scheduled for last Friday, with a refrain that the chairman will brief the shareholders ‘on the update’ on the acquisition bid at the court-ordered meeting. The Friday meeting was scheduled to mobilize supports from retail Nigerian shareholders, whose number and fragmented votes could proof decisive in the organisation and poll result tomorrow.

    Many sources confirmed to The Nation that several retail shareholders had registered their dissatisfactions over the acquisition with the capital market regulators, which had ignored the protests by shareholders at the company’s last general meeting to approve the scheme of arrangement. A source said the regulators explained that it approved the scheme because the extant laws did not prevent such bid, leaving the ball in the court of shareholders.

    But with growing protests by institutional and individual shareholders, a source said capital market regulators appeared to be reviewing developments on the acquisition bid in furtherance of statutory provisions that empower them to protect the generality of investors.

    Besides the alleged perceived unfairness of the acquisition bid to disenfranchise Nigerian shareholders from the commonwealth created together, several stakeholders have pushed against the bid because of possible unintended consequences.

    With 75 per cent equity stake, GSK UK will be able to push through any future major changes including mergers and acquisition, delisting, shares buy back, changing of public limited liability status, new capital issues and restructuring among others. Extant Nigerian laws require 75 per cent shareholdings to approve such major changes.

    Smarting from the voluntary delisting and reversion of several companies by the majority shareholders, especially the recent delisting of the iconic Nigerian Bottling Company (NBC), Nigerian shareholders are worried about the unspoken consequences. However, the board said GSK UK has confirmed that it will retain the listing of GSK Nigeria on the Nigerian Stock Exchange.

    A cross section of major minority shareholders’ leaders interviewed by The Nation had indicated they will vote against the deal.

    Aganga reiterated that the next item on the plan was to come up with a National Policy that would require the government and the private sector to patronise registered MSMEs.

    “This is because the government and the private sector are the major drivers of expenditure. Therefore, I believe that if we all work together, we will be able to leverage MSMEs to make the desired positive impact on the lives of the Nigerian people whom we are called to serve,” he noted.

    In his remarks, the Ogun State Governor, Senator Ibikunle Amosun, said that the development and growth of the MSME sector was critical to the country’s overall economic development, adding that his state would partner the Federal Government to fast-track the growth of the sector.

    He said, “I want to specially and publicly thank the Honourable Minister, Mr. Olusegun Aganga, for the excellent work he is doing to develop the MSMEs sector in Nigeria. Also I want to commend him for all the support he has been giving us to help industrialise Ogun State.

    “There is no doubt that MSMEs are the cornerstone for a successful industrialisation process. The best way to create jobs, generate wealth and transform the Nigerian economy is to get the MSMEs sector to be active and working. We will continue to work together with the Ministry of Industry, Trade and Investment in order to achieve our cardinal objectives of creating jobs and generating wealth for our people.”

  • UACN closes on Portland Paints’ acquisition deal

    The Boards of Directors of UAC of Nigeria (UACN) Plc and Portland Paints and Products Plc have executed definitive agreements in technical finalisation of the bid by UACN to acquire majority equity stake in the latter.

    The Nation gathered that the execution of definitive agreements has transited the scheme of acquisition to the regulatory authorities for their final approvals. The Securities and Exchange Commission (SEC), the apex capital market regulator that oversees mergers and acquisitions, was said to be considering the scheme.

    The definitive agreements set out the specific details of the business combination including the size, price, payment structure, changes in shareholding structure, and share exchange ratio if any.

    Market sources indicated that the final approval for the acquisition might come in June, in line with the second quarter expectation of the parties for the completion of the business combination.

    SEC is statutorily empowered to enforce full disclosures and transparency but it does not decide transactional details for parties to an issue. Its functions also do not include that of any anti-trust investigation, which usually could take longer review. As such, well-defined definitive agreements only require considerations of terms and agreements of the parties in the light of disclosures and regulatory filings and procedures.

    While UACN had concluded final phase of a similar deal for acquisition of majority equity stake in Livestock Feeds Plc last February, it received regulatory approval in March.

    Although the details of the definitive agreements with Portland Paints are yet to be made public, a source said UACN would go for at least 51 per cent and the deal could be around N1billion.

    UACN had acquired 51 per cent equity stake in Livestock Feeds at N1.3 billion. The deal was consummated through acquisition of 11 per cent shareholdings valued at N400 million through the secondary market and 40 per cent equity stake through a private placement valued at N904 million.

    UACN had in July last year announced that it had signed memorandum of understanding (MoU) with Portland Paints with a view to acquiring substantial equity stake in the company.

    UACN, which holds the controlling equity stake in CAP Plc, the largest quoted paints and chemical company, is seeking to leverage on potential synergies between CAP and Portland Paints, an equally profitable niche player with strong brands.

    The transaction will allow Portland Paints to leverage the relative strengths of UACN and yield considerable benefit to stakeholders in both companies.

    UACN has said its acquisitions were in furtherance of its strategy of building a portfolio of brands and businesses geared to the growth segments of the Nigerian economy, and partnerships that deliver long-term value to the company and its stakeholders.

    With their established presence in the paint industry, both UACN and Portland Paints are positioned to partner on deepening their presence in existing markets, achieve scope and scale economies in procurement, production and distribution.

    Portland Paints’ products include marine and protective coatings for oil and gas sector, sanitary ware, instant road repair material for repairs in all weather for cracks and potholes in asphalt, concrete and landing runway areas in airports as well as its traditional decorative and industrial paints.

    UACN is a large group of several active companies spreading through manufacturing, services, logistics and real estate sectors of the economy, the addition of Portland Paints would further enlarge the UACN Group.

    The UACN Group includes three quoted subsidiaries – CAP Plc, Livestock Feeds and UACN Property Development Company (UPDC) Plc; UAC Foods Limited, MDS Logistics Limited, Warm Spring Waters Nigeria Limited, Grand Cereals Limited, and Unico CPFA Limited.

    It has been divesting from some businesses as it refocuses on good-margin businesses. UACN is owned by more than 187,000 shareholders.

  • UACN closes on Portland Paints’ acquisition deal

    The Boards of Directors of UAC of Nigeria (UACN) Plc and Portland Paints and Products Plc have executed definitive agreements in technical finalisation of the bid by UACN to acquire majority equity stake in the latter.

    The Nation gathered that the execution of definitive agreements has transited the scheme of acquisition to the regulatory authorities for their final approvals. The Securities and Exchange Commission (SEC), the apex capital market regulator that oversees mergers and acquisitions, was said to be considering the scheme.

    The definitive agreements set out the specific details of the business combination including the size, price, payment structure, changes in shareholding structure, and share exchange ratio if any.

    Market sources indicated that the final approval for the acquisition might come in June, in line with the second quarter expectation of the parties for the completion of the business combination.

    SEC is statutorily empowered to enforce full disclosures and transparency but it does not decide transactional details for parties to an issue. Its functions also do not include that of any anti-trust investigation, which usually could take longer review. As such, well-defined definitive agreements only require considerations of terms and agreements of the parties in the light of disclosures and regulatory filings and procedures.

    While UACN had concluded final phase of a similar deal for acquisition of majority equity stake in Livestock Feeds Plc last February, it received regulatory approval in March.

    Although the details of the definitive agreements with Portland Paints are yet to be made public, a source said UACN would go for at least 51 per cent and the deal could be around N1billion.

    UACN had acquired 51 per cent equity stake in Livestock Feeds at N1.3 billion. The deal was consummated through acquisition of 11 per cent shareholdings valued at N400 million through the secondary market and 40 per cent equity stake through a private placement valued at N904 million.

    UACN had in July last year announced that it had signed memorandum of understanding (MoU) with Portland Paints with a view to acquiring substantial equity stake in the company.

    UACN, which holds the controlling equity stake in CAP Plc, the largest quoted paints and chemical company, is seeking to leverage on potential synergies between CAP and Portland Paints, an equally profitable niche player with strong brands.

    The transaction will allow Portland Paints to leverage the relative strengths of UACN and yield considerable benefit to stakeholders in both companies.

    UACN has said its acquisitions were in furtherance of its strategy of building a portfolio of brands and businesses geared to the growth segments of the Nigerian economy, and partnerships that deliver long-term value to the company and its stakeholders.

    With their established presence in the paint industry, both UACN and Portland Paints are positioned to partner on deepening their presence in existing markets, achieve scope and scale economies in procurement, production and distribution.

    Portland Paints’ products include marine and protective coatings for oil and gas sector, sanitary ware, instant road repair material for repairs in all weather for cracks and potholes in asphalt, concrete and landing runway areas in airports as well as its traditional decorative and industrial paints.

    UACN is a large group of several active companies spreading through manufacturing, services, logistics and real estate sectors of the economy, the addition of Portland Paints would further enlarge the UACN Group.

    The UACN Group includes three quoted subsidiaries – CAP Plc, Livestock Feeds and UACN Property Development Company (UPDC) Plc; UAC Foods Limited, MDS Logistics Limited, Warm Spring Waters Nigeria Limited, Grand Cereals Limited, and Unico CPFA Limited.

    It has been divesting from some businesses as it refocuses on good-margin businesses. UACN is owned by more than 187,000 shareholders.

  • Old Mutual completes acquisition of Oceanic Life

    Old Mutual and the Ecobank Group, announced yesterday that the former has completed the acquisition of a majority stake in Oceanic Life of the former Oceanic Bank in Nigeria, which was acquired by Ecobank.

    In a statement, the firms said the transaction will result in a name change from Oceanic Life Limited to Old Mutual Nigeria.

    “We are delighted to have completed the acquisition of this majority stake and we continue to work with Ecobank to expand our product offerings to the Nigerian market. The growth dynamics of the industry are exciting and prospects are good for further development of our business operations in West Africa,” Ralph Mupita, Chief Executive Officer (CEO), Old Mutual’s Emerging Markets business said.

    Also commenting, Ecobank CEO, Thierry Tanoh said the transaction is a welcome development, adding that Old Mutual is renowned as one of the finest insurance providers in Africa. “Ecobank Group would rather concentrate in its core area, which is banking, and leave insurance business for the experts, which Old Mutual represents. Ecobank will remain a minority shareholder in Old Mutual Nigeria,” he said.

  • Recapitalisation: Mortgage banks in merger, acquisition talks

    Ahead of the April 31 recapitalisation deadline, Primary Mortgage Institutions (PMIs) are forming an alliance to meet the new capital base.

    Last year, the Central Bank of Nigeria (CBN) directed mortgage institutions that want to operate nationally to raise their capital from N100 million to N5 billion and their state counterparts, N2.5 billion.

    Managing Director, Skyfield Savings & Loans Limited, Mr Kola Abdul, said the alliance was formed at a stakeholders’ meeting.

    He said: “Ahead of the April 31 deadline, the Mortgage Bankers Association of Nigeria (MBAN) brought together operators to brainstorm on the issue of recapitalisation and the options to be adopted.”

    According to him, some firms have agreed to merge, while others want to grow organically to meet the deadline.

    He said negotiations had started among those planning to merge so as to get the needed capital before the deadline.

    The paramount issue facing the companies, he said, was how to meet the deadline, not the size of their businesses.

    Abdul said: “The smaller mortgage banks need to merge with the bigger ones in view of the recapitalisation deadline. The Central Bank of Nigeria (CBN) has provided a flexible recapitalisation regime by directing the firms to either play at the state or national level. Therefore, the issue of merger is a welcome development that would foster the growth of the sub-sector.

    “Given the situations on ground, the issue of mergers and acquisitions cannot be ruled out.”

    He said mortgage firms’ contributions to the Gross Domestic Product (GDP) is low, adding that it would improve after recapitalisation. The recapitalisation would make the firms more active and function well in the financial market, he said.

    MBAN Executive Secretary, Mr Kayode Omotoso, said mortgage institutions would shop for funds at the capital market.

    Besides, there would be mergers and acquisitions as well as take-overs in the sector in the coming months.

    “There would be mergers; there would be acquisitions; there would be takeovers; there would be strategic investments and there would be efforts to go to the capital market for the mortgage banks to meet up with the deadline. More mortgage banks will approach the capital market to raise equity while the sector will approach the capital market to raise equity, hybrid and long-term debt instrument to finance home ownership,” he added.

     

  • Anambra community protests illegal acquisition of lands

    A massive protest yesterday grounded Awka community.

    Over 500 youths decried alleged attempts by those they described as cabals to illegally acquire lands in the area.

    They gave Governor Peter Obi two weeks to stop such elements or risk facing another problem in the state.

    The youths stormed the popular Aroma Junction in the heart of Awka where they addressed a waiting crowd before heading to Ngozika Estate along Onitsha-Enugu Expressway.

    The youth leader in the community, Obi Ochije, stated the Ezinano lands being sold by some individuals amounted to over 70 hectares.

    Each of the plots was being sold for N6.1 million by a group he identified as Rockland.

    The protesters carried placards bearing: “Ministry of Lands, keep off Ezinano lands”; “Gilbert Nwanna, you are a traitor”; “Ignatius Nwanna keep off from those lands”, among others

    Ochije said: “This is a peaceful protest. I have held the youths for too long not to cause any violence.

    “But if within the two weeks, nothing is done, what happened during the 2004 mayhem will be a child’s play.”

    Another youth leader in the community, Chief Kanayo Obidigbo, said Ezinano comprises 20 villages, alleging that some black legs had delved into the lands without any form of consultation.

    He said that any person that buys any plot of land belonging to Ezinano people does so at his or her own risk.

  • Armed Forces train 16,000 on skill acquisition

    The Chief of Defence Staff, Admiral Olabisi Ibrahim, has said over 16,000 spouses and other dependants of members of the Armed Forces have benefited from a skill acquisition training programme.

    Speaking during the 2012 skill acquisition training for spouses and dependants of Armed Forces personnel at the 13 Brigade Headquarters in Calabar, Cross River State, Admiral Ibrahim said the initiative was in line with the United Nations Millennium Development Goal, which is to eradicate poverty and hunger.

    The Chief of Defence Staff, who was represented by Air Commodore Esther Odok of the Defence Headquarters, Abuja, said participants would be given two weeks intensive training on vocational skills such as heat transfer printing, photography/photo processing, information and communication technology/ business centre, catering/fast foods.

    Others include tailoring, hair dressing/beauty salon, soap making/cosmetics, beads and hat making, agricultural and allied services and embroidery.

    According to him, the choice of the vocations was informed by the need to attain maximum gain in a limited period of time and engender professional and entrepreneurial skills to ease the establishment of businesses.