Shareholders of Dangote Flour Mills Plc (DFM), on Monday, unanimously approved the acquisition of the company by Crown Flour Mills Limited, the Nigerian subsidiary of global food and agri-business conglomerate, Olam International Limited, after a whopping payment of N120 billion to the shareholders.Olam has made an offer for the acquisition of 100 per cent equity in Dangote Flour Mills for a consideration of N24.00 per share. The acquisition was carried out through a scheme of arrangement. Most of the shareholders who spoke at the meeting lauded the company’s management for the noble decision, describing it as one in the best interest of the shareholders.
A notable financial analyst and shareholder, Nona Awoh, thanked the management on the offer of N24 per share and reminded other shareholders that the last time the share price of the company increased significantly to N20 per share was in 2010. Another leader of the shareholders group, Mr. Boniface Solomon, described the deal as a very good one for the shareholders, saying the stock had really been struggling in view of the current realities in the nation’s economy, further stating that the N24 per share was indeed a good price for his members.
The Managing Director (MD) of Crown Flour Mills Limited, Anurag Shukia, said his company intended to maintain and expand DFM’s business as well as provide enhanced manufacturing capacity and create synergies to deliver improved products to customers across the country. With the acquisition, the entire 4,994,886,771 ordinary shares of 50 kobo each in DFM held by the scheme shareholders of the company will be transferred to Crown Flour.
The N24 per share that will be given to the shareholders for 50 kobo per share represents a 124 per cent premium on the share price of DFM as at the close of April 18, 2019, being the last business day prior to the date the proposal was received and announced on the floor of the Nigerian Stock Exchange (NSE); and a 145 per cent premium on the three-month weighted average share price of the company as at April 18, 2019. Benefits to the shareholders include, but are not limited to opportunities for shareholders of DFM, other than Crown Flour, to enhance the value of their investment in the company and exit at an attractive pricing; in addition, the scheme is expected to create valuable synergies between the operations of Crown Flour and DFM to ensure improved revenue generation capacity, reduced operational costs and enhanced profit.
It will also enable Olam focus on the flour business to provide the necessary financial and technical support required to maintain and expand the business.
