Nigeria: Unique

PZ Cussons (Holdings) UK set out on 4 September 2023 to buy different stockholders’ shares numbering 1.06 billion at N21 per unit.

The deal looking for to promote PZ Cussons Nigeria to core buyers from Britain hit a brick wall halfway after the Nigerian capital market watchdog sought clarification on some irregularities within the PZ board’s request for approval, sources acquainted with the matter advised PREMIUM TIMES.

Nigeria’s Securities and Exchange Commission (SEC) raised an eyebrow after pinpointing flaws within the doc by PZ Cussons Nigeria asking the regulator to endorse PZ Cussons (Holdings) UK, which has a 73.3 per cent curiosity within the firm to amass different shares held by minority shareholders.

“Some deficiencies had been noticed within the doc submitted to SEC by PZ Cussons and people anomalies had been queried,” one supply concerned within the regulatory course of mentioned, asking to not be named.

“PZ was notified to impact adjustments and revert again to the Fee for the letter of No Objection, nevertheless it failed to reply. One of many famous deficiencies was that PZ Cussons needed to purchase the shares at a value far lower than the present market worth.”

CEO Dimitris Kostianis’ largest task since taking the helm on the firm final June was arguably to ship the deal to amass minority shareholders’ stakes within the entity for PZ Cussons (Holdings) Restricted UK, the core investor whose curiosity he represents on the administrators’ board.

PZ Cussons (Holdings) UK set out on 4 September 2023 to buy different stockholders’ shares numbering 1.06 billion at N21 per unit, a proposal with a premium of simply 9.9 per cent greater than the closing market value that day.

The board introduced a proposal assessment two months after, pricing the potential takeover at N23 per unit.

“The provide value of ₦23 represents a premium of 35% to the Firm’s share value of ₦17 on 17 August 2023, being the final traded value previous to the provide date,” PZ Cussons Nigeria mentioned in a regulatory observe.

On 9 November 2023, the day the announcement was made, PZ Cussons Nigeria’s shares closed commerce within the open market at N21.05.

Within the weeks that adopted, the inventory rose inconsistently and closed at N40 per unit on Wednesday morning, when PZ Cussons disclosed that the deal had fallen via.

The Wednesday closing value was 73.9 per cent greater than the N23 PZ Cussons (Holdings) UK tabled as its reviewed provide, making the provide significantly unattractive for buyers, who usually need the buyout value to come back at a premium to the market value.

The book value of the corporate had plunged N23.2 billion into the pink within the six months to final November after reporting a document international trade lack of N52.4 billion, twenty occasions greater than a 12 months in the past, inflicting its liabilities to surpass its property.

That was one motivation for the core investor to cost the provide low.

All the identical, the Nigerian operation of PZ Cussons Plc, the Manchester-based client items producer, stays enticing for any core investor to think about for full possession.

Nigeria is the biggest and most various single market of the group, which has footprints in locations in Europe, North America, Asia-Pacific, and Africa.

That issue makes divesting its stake within the Nigerian unit not on the playing cards for the mum or dad firm at a time when multinational friends like P&G, GlaxoSmithKline and Sanofi S.A, exhausting hit by the identical international trade disaster within the nation, have taken the exit door.

The corporate has constructed strong client loyalty and carved a sizeable slice of the marketplace for itself with manufacturers like Premier, Imperial Leather-based, Mamador, King’s Pure Vegetable Oil, Robb, and Morning Recent amongst others since its founders, Scottish George Patterson and Greek George Zochonis, opened the Nigerian subsidiary as a buying and selling submit 125 years in the past.

Nigeria contributed 34.7 per cent (£227.9 million) of the PZ Cussons income for 2023, in accordance with its audited earnings report.