By Nse Anthony-Uko
The market capitalisation of the Nigerian Stock Exchange (NSE) declined by N65.3 billion on Tuesday after 640.59 million shares of Seven Up Bottling Company Plc were delisted from the daily official list of the Exchange.
In January, Seven-Up’s minority shareholders backed a $70 million buyout bid by majority investor Affelka.
The bottler received the takeover proposal in August, 2017 after posting losses, in a deal aimed at restructuring the Seven-Up, Pepsi and Mirinda product lines. Seven-Up Bottling Company last traded at N101.97 per share, valuing the company at N65.32 billion ($214 million).
Seven-Up Bottling Company held a court ordered meeting in January, where shareholders ratified the scheme of arrangement for the buy-out. Under the scheme, shareholders are to be paid a cash consideration of N125 per share as modified at the court ordered meeting.
According to the scheme, “the shares be transferred to Affelka, Sparkplexi or any other nominee of Affelka. The holders of the scheme shares be paid a cash consideration as modified at the court-ordered meeting to N125 per share by Affelka. That upon the scheme becoming effective, the ordinary shares of the Petitioner be delisted from the daily official list of the Nigerian Stock Exchange.”
Investment analysts at Afrinvest West Africa, advised the minority shareholders of Seven-Up to accept the tender offer from Affelka.
According to Afrinvest, given the recent weak financial performance, historical illiquidity characterising Seven-Up’s stock, which will possibly worsen post-acquisition and the premium offered by Affelka relative to the current market price, they recommended investors tender their shares for the price consideration.
Chairman, Seven-Up Bottling Company Plc, Mr. Faysal El-Khalil said the acquisition will create considerable benefits and opportunities for all stakeholders of the company while also helping to protect minority shareholders from a continuous erosion of value. “Furthermore Seven-Up Bottling Company Plc is again assured of Affelka’s long term commitment to the company and Nigeria,” El-Khalil
The soft drinks bottling industry has been hit by slow demand arising from weak economic growth in Nigeria, Africa’s most populous nation, which recently emerged from a recession and a currency crisis that stifled raw material imports.