Diageo plans to increase stake in Guinness Nigeria

Guinness Nigeria Plc on Wednesday notified the Nigerian Stock Exchange that its parent company, Diageo Plc, had the intention of increasing its stake in the Nigerian subsidiary from 54.3 per cent to a maximum of 70 per cent.

According to the notice, Diageo, acting through its wholly owned subsidiary, Guinness Overseas Limited, has approached the Board of Directors of Guinness Nigeria Plc with intention of making the offer.

“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,” the notice said.

It explained that at the maximum offer price, the proposed offer would represent a premium of 36 per cent to the 30-day volume weighted average share price and 40 per cent to the Company’s closing share price on September 8, 2015.

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

The company, however, stressed that Wednesday’s announcement was of Guinness Overseas intention and did 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,” it added

The company, which said further developments would be communicated to shareholders in due course, said the proposed partial tender offer would be subject to requisite regulatory approvals, including those of the Nigerian Stock Exchange and the Securities and Exchange Commission.

The formal offer documentation, it said, would be posted to shareholders as soon as these approvals are obtained.

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