The long-term investors Unilever Nigeria, subsidiary of agro-industrial group Unilever Overseas, now have a new opportunity to reach the capital gain from the opportunity that was offered between 2011 and 2013 when the Action on the Nigerian Stock Exchange (Nigerian financial market) exploded 57% (in 2012) to reach 67 naira. This opportunity also applies to investors who acquired shares in late 2014, when they have lost up to 28% of their value, reaching 27 naira.
Until 10th June 2015, interested investors can sell their shares, against 45.5 naira each. A very tempting price that represents a gain of 33.8% compared to March 28th, and 33.2% compared to the average unit value they display the last three months. Recall that Unilever Overseas wants to carry 75% its stake in its Nigerian subsidiary is currently 50.1%.
The Offer Price represents a premium of 33.8% to the Company’s closing share price on 23rd March 2015, the day prior to Unilever announcing its intention to make the Offer, and a premium of 33.2% to the 3 months Volume Weighted Average share price as at the same date. The total value of the transaction at the intended Offer Price is approximately ₦42.871 billion (€192.6 million at prevailing exchange rates).
The reaction of certain institutional investors, such as Arisaig Africa Consumer Fund Limited, Unilever Nigeria represents 5.16% of its portfolio, will be particularly forward. Holder of Unilever Nigeria 120.5 million shares (over 10% of the shares sought by the group), its leaders might be interested in taking added value options and limit their presence in a country that still represents a small profitability risk
Total value of transaction at intended offer price is approximately N42.871 billion. The management of Unilever Nigeria in recent times had been compelled by cash flow pressure to increase its borrowing considerably in the year. Short-term borrowings multiplied four times to N12.06 billion in 2014.