Diageo moves to acquire 70% equity in Guinness Nigeria

tenders offer of N175 per share

Diageo plc has notified the Nigerian Stock Exchange (NSE) of its intention to raise its equity stake in Guinness Nigeria plc.

Diageo, acting through its wholly owned subsidiary, Guinness Overseas Limited, has approached the board of directors of the company with an intention to make an offer to increase Diageo’s equity stake in the company from 54.3 percent up to a maximum of 70 percent, and to maintain the company’s listing on the NSE.

“If Diageo’s decided to proceed with the proposed transaction, it is intended that subject to regulatory approval, Guinness Overseas will launch a partial tender offer at a price not higher than N175 per share in cash, giving all shareholders the opportunity to elect to sell some or all of their shares in the company,” said Guinness Nigeria in a letter signed by its company secretary, Sesan Sobowale.

The proposed partial tender offer is still subject to requisite regulatory approvals, including those of the NSE and the Securities and Exchange Commission (SEC).

Guinness Nigeria told the NSE management that at the maximum offer price, the proposed offer would represent a premium of 36 percent to the 30-day volume weighted average share price and 40 percent to the company’s closing share price on September 8, this year.

Guinness Nigeria released its full year results for the period ended June 30, 2015, recently at the NSE. The company reported a 9 percent increase in revenue to N118.495 billion, from N109.202 billion in the corresponding year 2014.

The company’s profit before tax (PBT) declined by 8 percent to N10.795 billion from N11.681 billion in 2014, while profit after tax was down by 19 percent to N7.794 billion from N9.573 billion in 2014.

Nigeria delivered 13 percent volume growth, driven primarily by the national roll out of Orijin. “This year, we launched our new ‘made of black’ campaign in Africa to capture the next generation of Guinness consumers. Beer was up 8 percent net sales in the region,” said Diageo plc in its 2015 preliminary results fast facts.

“Guinness Overseas may also seek to acquire shares in the market at a price not higher than the offer price of N175 per share. Diageo would exchange those shareholders that wish to divest their holding in Guinness Nigeria to make contact with Stanbic-IBTC Stockbrokers Limited.

“Please note that today’s announcement is of Guinness Overseas ‘intention and does not constitute the announcement of an offer itself and creates no obligation on Guinness Overseas or Diageo to make an offer.

“Accordingly, we wish to advise Guinness Nigeria‘s shareholders that there can be no certainty that any offer will be made, nor as to the price or terms of any offer that may be made. Further developments will be communicated to shareholders in due course,” Guinness Nigeria said.

Source : BusinessDay

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