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CAP Offers Portland Paints’ Shareholders N2.90 in Proposed Merger

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CAP Portland Paints merger

By Dipo Olowookere

Two leading paint makers in Nigeria, Chemical and Allied Products (CAP) Plc and Portland Paints and Products Nigeria Plc are planning to merge their respective businesses into a single entity.

The new company after the completion of the deal will be CAP and the transaction is expected to deliver an accretive value to shareholders of both companies, Business Post gathered.

In a notice to the Nigerian Stock Exchange (NSE) on Monday, it was disclosed that CAP is offering shareholders of Portland Paints a choice to receive N2.90 for each share of the firm in their portfolio or one new ordinary share of CAP for every eight shares of Portland Paint held by them.

The proposed consideration represents a 45 per cent premium to the last traded share price of Portland Paints on October 16, 2020, being the last business day prior to the date on which CAP sent its merger proposal to the board of Portland Paints and a 41 per cent premium on the trading price as at close of trading on October 23, 2020.

The respective boards of CAP and Portland Paints said this merger was driven by the strategic objectives of both firms to drive growth and expansion within the Nigerian and African markets.

They further expressed a strong confidence that this deal will provide a unique opportunity to change the Nigerian paints and coatings landscape.

CAP and Portland Paints play in distinct segments, and the enlarged CAP will have a broader portfolio covering the top-end/premium decorative segment, the mid-market decorative segments as well as the industrial segment (in particular marine and protective coatings).

“We believe that the proposed merger will provide our customers with access to a broader product portfolio and a wider range of value options to meet their needs.

“The combination of CAP and Portland Paints will create a formidable paints and coatings company that will be strategically positioned across segments as a result of its combined brand portfolio (Dulux, Sandtex, Caplux and Hempel); its diversified product ranges spanning decorative and industrial with widespread distribution channels and retail footprint in Nigeria,” they both said.

“I am excited by the prospect of an enlarged company with a broader decorative paint portfolio covering the premium, mid-market and affordable segments and the inclusion of marine and protective coatings, all of which will benefit our customers and shareholders,” the Managing Director of CAP, Mr David Wright, said.

“CAP’s business is complementary to ours, and both companies will be better able to serve our respective customers by coming together. I believe the combination of Portland Paints and CAP will yield significant benefits for all of our stakeholders,” the MD of Portland Paints, Bolarin Okunowo, stated.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via [email protected]

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Economy

Naira Remains Stable at N1,500/$1 at Official Market

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Fake Naira notes banknotes

By Adedapo Adesanya

The Naira closed flat against the United States Dollar at N1,500.65/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday, February 7, after recording losses in four straight sessions in the trading week.

The recent pressure on the market across majorly regulated channels came despite recent policy moves by the Central Bank of Nigeria (CBN) creating more trading transparency and ethical practices.

However, the domestic currency depreciated against the Pound Sterling in the official market yesterday by N8.78 to trade at N1,868.76/£1 compared with the previous day’s rate of N1,859.98/£1 and against the Euro, it weakened by N1.95 to settle at N1,557.13/€1, in contrast to Thursday’s closing price of N1,555.18/€1.

At the parallel market, the Nigerian currency improved its value further against the US Dollar on Friday by N5 to sell for N1,565/$1 compared with the preceding session’s N1,570/$1.

As for the cryptocurrency market, it slumped yesterday after the US Bureau of Labor Statistics said the country’s economy added 143,000 jobs in January, below the forecast 170,000 and down from 256,000 in December.

Ethereum (ETH) declined by 4.5 per cent to sell at $2,615.76, Cardano slumped 4.3 per cent to trade at $0.6949, Litecoin (LTC) depreciated by 1.9 per cent to settle at $103.35, Dogecoin (DOGE) fell by 1.7 per cent to $0.2476, Solana (SOL) recorded a 1.4 per cent loss to close at $193.39, Bitcoin (BTC) depleted by 1.2 per cent to $96,138.53, and Binance Coin (BNB) went down by 1.1 per cent to quote at $578.78.

On the flip side, Ripple (XRP) gained 1.8 per cent to trade at $2.36, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat $1.00 each.

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Economy

Oil Prices up on Fresh Iran Crude Export Sanctions

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Crude Oil Prices

By Adedapo Adesanya

Oil prices went up on Friday after new sanctions were imposed on Iran’s crude exports, with Brent crude futures expanding by 37 cents or 0.5 per cent to $74.66 per barrel, and the US West Texas Intermediate (WTI) crude futures growing by 39 cents or 0.55 per cent to $71.00 a barrel.

However, for the week, prices were down by 2 per cent as investors worried about US President Donald Trump’s renewed trade war with China and threats of tariffs on other countries.

Reports of planned tariffs from the Trump administration reined in gains following the sanctions announced on Thursday.

The American president on Friday said he plans to announce reciprocal tariffs on many countries by Monday or Tuesday of next week.

President Trump did not identify which countries would be hit but suggested it would be a broad effort that could also help solve US budget problems.

However, Mr Trump’s Commerce secretary nominee Howard Lutnick voiced concerns about India’s high tariff rates, while US Trade Representative nominee Jamieson Greer discussed US complaints about Vietnam’s and Brazil’s tariffs and trade barriers.

He had earlier announced a 10 per cent tariff on Chinese imports as part of a broad plan to improve the US trade balance, but suspended plans to impose steep tariffs on Mexico and Canada.

But market analysts noted that this could be a major escalation of his offensive to tear up and reshape global trade relationships in the US favour.

On Thursday, it imposed new sanctions on a few individuals and tankers helping to ship millions of barrels of Iranian crude oil per year to China as it intensified war against Iran.

Iran’s President, Mr Masoud Pezeshkian, called on its fellow members in the Organisation of the Petroleum Exporting Countries (OPEC) to stand united against ‘destabilizing’ US sanctions, meeting with OPEC Secretary General Khaitam al-Ghais as the country assumes the rotating presidency of the organisation.

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Economy

Bulls Tighten Grip on Nigerian Exchange With 0.48% Growth

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Nigerian Exchange

By Dipo Olowookere

The Nigerian Exchange (NGX) Limited appreciated further by 0.48 per cent on Friday after market participants showed no signs of slowing down in their hunt for stocks with sound fundamentals.

During the session, all the key sectors of the bourse witnessed bargain-hunting activities, with the banking counter growing by 1.72 per cent.

Further, the insurance index expanded by 1.64 per cent, the industrial goods sector jumped by 0.77 per cent, the consumer goods industry rose by 0.11 per cent and the energy space also gained 0.11 per cent.

Consequently, the All-Share Index (ASI) increased by 502.88 points to 105,933.03 points from the 105,430.15 points it ended a day earlier, and the market capitalisation gained 0.47 per cent or N305 billion to settle at N65.592 trillion compared with Thursday’s N65.287 trillion.

A total of 37 equities ended on the gainers’ chart yesterday and 17 equities on the losers’ table, implying a strong investor sentiment and positive market breadth index.

Academy Press appreciated by 9.93 per cent to N2.99, Cadbury Nigeria also improved its value by 9.93 per cent to N29.35, Eterna rose by 9.90 per cent to N36.65, Livestock Feeds expanded by 9.85 per cent to N5.80, and UPDC soared by 9.75 per cent to N2.59.

On the flip side, Multiverse lost 9.95 per cent to close at N9.05, MeCure Industries shed 9.71 per cent to N12.55, NPF Microfinance Bank slumped by 7.94 per cent to N1.74, Learn Africa declined by 4.44 per cent to N4.30, and Tantalizers soured by 3.85 per cent to N2.00.

Investors transacted 468.2 million shares worth N13.2 billion in 12,612 deals on the last trading session of the week compared with the 537.2 million shares valued at N23.0 billion traded in 15,450 deals in the preceding session, representing a decline in the trading volume, value and number of deals by 12.84 per cent, 42.61 per cent and 18.37 per cent, respectively.

The busiest stock for the day was Zenith Bank with a turnover of 108.8 million units worth N5.0 billion, Cutix traded 24.3 million units valued at N58.7 million, Access Holdings exchanged 23.6 million units for N657.7 million, Sterling Holdings transacted 22.8 million units valued at N136.0 million, and Fidelity Bank sold 20.4 million units worth N426.3 million.

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