Continental Reinsurance’s share price rose by 33.33 per cent last week to N2 per share after a major investor launched a bid to acquire all outstanding and issued shares of the Nigerian company.
CRe African Investments Limited, a majority core investor in the reinsurance company, has submitted an offer from to acquire all the outstanding and issued shares of Continental Reinsurance.
In a regulatory filing at the Nigerian Stock Exchange (NSE), the board of Continental Reinsurance confirmed the acquisition bid, noting that the bid has received preliminary regulatory approval.
The acquisition is expected to be executed through a Scheme of Arrangement, under Section 539 of the Companies & Allied Matters Act Cap C20 Laws of the Federation of Nigeria 2004 and other applicable rules and regulations.
CRe African Investments is offering N2.04 per share for the 10.37 billion ordinary shares of 50 kobo each or one ordinary shares of $1 each in the capital of CRe African Investments for every 176 ordinary shares of 50 kobo each held in Continental Reinsurance.
The proposed price of N2.04 represents a 46.76 per cent premium to the last traded share price of the company on October 5, 2018, being the last business day prior to the date the proposal was received from CRe African Investments and a 36.0 per cent premium on the trading price as at close of business on November 19, 2018.
CRe African Investments was said to be making the offer to initiate a much-needed restructuring exercise for Continental Reinsurance, with a view to consolidating the reinsurance company’s Nigerian operations and repositioning it for enhanced competitiveness in the global insurance market.
Already, the company has received preliminary approval of “No Objection” from the Securities & Exchange Commission (SEC). The scheme is however subject to the approval of the shareholders at a court-ordered meeting scheduled for December 20, 2018 in Lagos as well as the sanction of the Federal High Court.
“Further details will be communicated to the market upon relevant approvals from shareholders and regulators. Shareholders are advised to exercise caution when dealing in Continental Reinsurance’s shares until a further announcement is made,” the company stated.
Continental Reinsurance was incorporated in 1985 and started business as a private reinsurance company in Nigeria. In January 1987, it began to operate as a general reinsurer and then became a composite reinsurer in January 1990, offering both treaty and facultative life and non-life reinsurance, with a well-diversified business mix and customer base.
As part of its goal to become a recognised leading reinsurance company in Africa, it converted to a public limited liability company in 2000. After it recapitalised to the tune of N10 billion in 2007, it listed its shares on the NSE in May 2007.
With five client service centres in Nigeria, Cameroon, Cote d’Ivoire, Kenya and Tunisia with Nigeria as headquarters, it has grown a diversified portfolio across 43 countries.
