Olam Offers to Acquire Dangote Flour for N130bn

April 23, 2019
dangote flour court ordered meeting

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.

Modupe Gbadeyanka

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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