Guinness Nigeria shares rise after Diageo news

The shares of Guinness Nigeria Plc rose by 18.90 per cent or N24.19 last week to close at N152.19, making it the second biggest gainer for the week behind Trans-nationwide Express Plc, which rose by 23.36 per cent or 25 kobo to close at N1.32 per share.

The demand for Guinness shares, which led to the price appreciation, is believed to have been influenced by news that Diageo Plc, the parent company to Guinness Nigeria, is planning to increase its stake in the company.

Guinness Nigeria had on Wednesday notified the Nigerian Stock Exchange of Diageo’s intention of increasing its stake in the Nigerian subsidiary from 54.3 per cent to a maximum of 70 per cent through its wholly owned subsidiary, Guinness Overseas Limited.

“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.

With the stock opening at N125.22 on Wednesday, and Diageo considering a price of N175, investors saw gains to be made by buying at N125.22.

The stock had a slow start to the week, gaining 0.78 per cent or N1 to close at N129 on Monday.

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Source : Punch

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