Economy
Olam Offers to Acquire Dangote Flour for N130bn
By Modupe Gbadeyanka
A leading food and agri-business company, Olam International Limited, has approached the board of Dangote Flour Mills Plc with the aim to acquire the flour milling firm, which is owned by Africa’s richest man, Mr Aliko Dangote.
Olam, which owns a stake in Dangote Flour Mills, wants to buy up the remaining stake for the sum of N130 billion.
In a notice to the Nigerian Stock Exchange (NSE) on Tuesday, it was disclosed that Olam wants a total control of the company.
At the moment, Olam, through its subsidiary, Crown Flour Mills Limited, controls a total of 5,113,229 shares in the issued share capital of Dangote Flour Mills. The firm is now offering N130 billion to take control of an additional 5 billion issued shares of the milling firm.
“Dangote Flour Mills hereby notifies its shareholders, the Nigerian Stock Exchange (NSE) and the investing public that the board of DFM has received a binding offer from Olam International Limited to acquire all the outstanding and issue shares of DFM that are not currently owned by Olam through its subsidiary, Crown Flour Mills Limited.
“As at the date of this announcement, Olam, through its subsidiary, holds 5,113,229 shares in the issued share capital of DFM.
“The total consideration offered by Olam and being considered by the board of DFM for the 5 billion issued shares of the company is N130 billion. The consideration represents the enterprise value on a debt-free, cash-free basis payable in cast the closing of the proposed transaction.
“This consideration will be adjusted for net working capital and net debt as of March 31, 2019 or any other later date that may be agreed by Olam and the board of DFM to arrive at the final price payable to equity shareholders.
“The final price to be paid to the shareholders of the company would be adjusted downwards to exclude shares held by Olam through its subsidiary,” Dangote Flour Mills informed investors today.
It explained that the “transaction will be executed through a Scheme of Arrangement, under Section 539 of the Companies & Allied Matters Act Chapter C20 Laws of the Federation of Nigeria 2004 and other applicable laws, rules and regulations.”
“The offer is subject to amongst other things, shareholders’ approval, regulatory approvals, the sanction of the Federal High Court, as well as the absence of a material adverse change in DFM. If the conditions of the transaction are satisfied and same is sanctioned by the court, the company would be delisted from the Nigerian Stock Exchange,” it added.
The company promised that, “The board will review the offer in the best interest of the shareholders [and] keep both the capital markets and the public updated on tangible development in this regard, in line with the applicable regulatory requirements.”
Concluding, the company emphasised that, “Shareholders and potential investors are advised to exercise caution when dealing in DFM’s shares until a further announcement is made.”
Business Post reports that at the close of business on Tuesday, shares of Dangote Flour Mills Plc were quoted at N11.75k per unit, appreciating by N1.05k or 9.81 percent.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.16 per cent decline on Tuesday, January 21, extending its loss this week to two.
This further depleted the market capitalisation of the alternative stock exchange by N1.65 billion at the close of transactions to N1.071 trillion from the N1.073 trillion it closed in the preceding session.
In the same vein, the NASD Unlisted Security Index (NSI) slid by 4.79 points to wrap the session at 3,100.33 points compared with 3,105.12 points recorded in the previous session.
The bourse ended with two price losers yesterday led by Geo Fluids Plc, which gave up 32 Kobo to trade at N4.38 per share versus Monday’s closing price of N4.70 per share and FrieslandCampina Wamco Nigeria Plc, which depreciated by 15 Kobo to close at N39.50 per unit compared with the previous day’s N39.65 per unit.
On the second trading day of the week, the number of deal carried out slightly went up by 8.3 per cent to 13 deals from the 12 deals executed at the previous trading session.
Also, the value of transactions increased by 97.2 per cent to N4.5 million from the N2.5 million recorded a day earlier, while the volume of securities traded in the session declined by 71.6 per cent to 183,780 units from the 767,610 units recorded on Monday.
FrieslandCampina Wamco Nigeria Plc remained the most traded equity by value (year-to-date) with 4.1 million units worth N162.9 million, followed by Geo-Fluids Plc with 9.1 million units valued at N44.0 million, and 11 Plc with 55,358 sold for N14.5 million.
Also, Industrial and General Insurance (IGI) Plc closed the day as the most active stock by volume (year-to-date) with 25.3 million units worth N5.9 million, trailed by Geo-Fluids Plc with 9.1 million units sold for N44.0 million, and FrieslandCampina Wamco Nigeria Plc with 4.1 million units valued at N162.9 million.
By Adedapo Adesanya
Pressure further mounted on the Nigerian Naira in the different segments of the foreign exchange market on Tuesday, making its value to shrink against the United States Dollar at the close of business.
In the Nigerian Autonomous Foreign Exchange Market (NAFEM), the domestic currency crashed against its American counterpart during the session by 0.18 per cent or N2.73 to settle at N1,552.78/$1, in contrast to Monday’s closing price of N1,550.05/1.
But against the Pound Sterling and the Euro, the local currency traded flat in the official market yesterday at N1,906.98/£1 and N1,613.48/€1, respectively.
As for the black market segment, the Naira weakened against the Dollar on Tuesday by N5 to sell for N1,670/$1 compared with the preceding day’s value of N1,665/$1.
Meanwhile, the cryptocurrency market heaved a sigh of relief during the session as President Donald Trump created a crypto task force dedicated to “developing a comprehensive and clear regulatory framework for crypto assets.”
The task force will be led by Commissioner Hester Peirce, a long-time advocate for the crypto industry, and will work closely with the crypto industry to develop regulations. This is after Mr Gary Gensler, an opponent of crypto, officially stepped down as chairman of the US Securities and Exchange Commission (SEC) after Mr Trump’s term started.
The task force will also work with Congress, providing “technical assistance” as it crafts crypto regulations.
Solana (SOL) recorded a 9.2 per cent growth to sell at $257.09, Dogecoin (DOGE) rose by 7.6 per cent to $0.36789, Ripple (XRP) added 4.0 per cent to finish at $3.18, and Bitcoin (BTC) increased by 3.7 per cent to $105,515.03.
Further, Binance Coin (BNB) appreciated by 2.8 per cent to close at $699.01, Cardano jumped by 2.1 per cent to trade at $0.9972, Ethereum (ETH) soared by 2.0 per cent to settle at $3,308.21, and Litecoin (LTC) went up by 1.5 per cent to end at $116.72, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
By Adedapo Adesanya
The price of the Brent crude oil grade went below the $80 mark on Tuesday after it shed 86 cents or 1.1 per cent to trade at $79.29 per barrel after the US President, Mr Donald Trump, signaled the possibility of his country boosting its oil production.
This move raised concerns of higher US output in a market widely expected to be oversupplied this year, with the US West Texas Intermediate (WTI) crude futures falling by $1.99 or 2.6 per cent during the session to $75.89 per barrel.
On his first day in office, the US President signed an executive order to unleash America’s energy by easing the barriers to oil and gas extraction and production and revoking a series of climate orders by former President Joe Biden.
As pledged in the campaign, the executive order follows the declaration of a national energy emergency.
The declaration includes measures to expedite energy infrastructure delivery, and emergency approvals by agencies “to facilitate the identification, leasing, siting, production, transportation, refining, and generation of domestic energy resources, including, but not limited to, on Federal lands.”
This will likely confirm expectations that the oil market will be oversupplied this year after weak economic activity and energy transition efforts weighed heavily on demand in top-consuming nations the US and China.
President Trump also said he was considering imposing 25 per cent tariffs on imports from Canada and Mexico from February 1, rather than on his first day in office as promised.
The delay helped ease concerns of an immediate tightening of the market among US refiners, many of which are geared to process the type of crude oil supplied by these countries.
The US Energy Information Administration (EIA) reiterated on Tuesday its expectations for oil prices to decline both this year and next.
On its part, the Organisation of the Petroleum Exporting Countries (OPEC) projects robust demand growth in the world both this year and next.
In 2025, OPEC says demand is set to grow by 1.4 million barrels per day leaving its projection unchanged from the December report.
However, losses were also limited after the US president said his administration would “probably” stop buying oil from Venezuela. The U.S. is the second-biggest buyer of Venezuelan oil after China.
Also weighing on prices on Tuesday was the potential end to the shipping disruption in the Red Sea.
Yemen’s Houthis said on Monday they will limit their attacks on commercial vessels to Israel-linked ships provided the Gaza ceasefire is fully implemented.
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