A Singaporean agro-allied company, Olam International Limited, yesterday offered to buy into Dangote Flour Mill (DFM) Plc as part of plans to rejig its port folio and expand to West Africa.
Dangote Flour Mills, in a notice to the Nigerian Stock Exchange (NSE), said the total consideration offered by Olam to acquire its five billion shares was N130 billion.
“The total consideration offered by Olam and being considered by the Board of DFM for the entire 5,000,000,000 issued shares of the company is N130bn. The consideration represents the enterprise value on a debt-free, cash-free basis, payable in cash at the closing of the proposed transaction.
“This consideration will be adjusted for the 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,” said DFM.
It also stated that the offer is subject to, among 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 the same is sanctioned by the court, the company would be delisted from the Nigerian Stock Exchange,” said.
It also said the DFM board would review the offer in the best interest of the shareholders.
“The board will keep both the capital markets and the public updated on tangible development in this regard, in line with the applicable regulatory requirements,” DFM added.
Olam was established in Nigeria in 1989 as an exporter of cashew nuts 30 years ago and has since grown into a global firm with operations in more than 60 countries and a market value of $4.5bn.
Now listed on the Singapore Exchange the deal with DFM, according to Bloomberg, will enable it to build on a country workforce of almost 3,000 while tapping local demand for bakery, snacks and pasta products.
The company said the acquisition of DFM supports the strategy of the grain and animal feed business, one of its prioritised platforms for growth, to expand its wheat milling capacity in high-growth markets, such as Nigeria.
“We are confident about the growth prospects in this country and this acquisition, doubling our installed capacity here, is evidence of our long-term commitment to the Nigerian economy,” said the managing director and chief executive officer, Olam Grains and Animal Feed, Mr. Keshav Chandra Suresh
