Singapore-based food and agriculture Company, Olam International Limited, has offered to buy Dangote Flour Mills Plc for an enterprise value of N130bn.
This is part of the company’s West Africa expansion plan.
Olam was founded in Nigeria as an exporter of cashew nuts in 1989 but has since grown into a global giant operating in more than 60 countries with a market value of $4.5bn.
The Managing Director and Chief Executive Officer, Olam Grains and Animal Feed, K.C. Suresh, said concerning the acquisition, “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.”
Dangote Flour Mills, in a notice to the Nigerian Stock Exchange on Tuesday, told its shareholders and the investing public that its board had received a binding offer from Olam International Limited to acquire all of the outstanding and issued shares of Dangote Flour Mills “that are not currently held by Olam or its subsidiary, Crown Flour Mills Limited.”
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The notice read, “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.”
DFM however noted that the offer was 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 adding; “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.”
DFM’s shares jumped 9.8 per cent to N11.75 after the offer was made public.
