Olam International Limited has acquired Dangote Flour Mills for N120 billion.
The acquisition was unanimously agreed to on Monday by Shareholders of Dangote Flour Mills Plc (DFM), and the new owner is Crown Flour Mills Limited, the Nigerian subsidiary of global food and agri-business conglomerate, Olam International.
The shareholders who spoke at the meeting applauded the company’s management for the moral decision, describing it as one in the best interest of the shareholders.
Olam’s offer also was for the acquisition of 100 per cent equity in Dangote Flour Mills Plc is for a consideration of N24.00 per share.
Nona Awoh, a notable financial analyst and one of the shareholders of the company, 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 the year 2010.
Another leader of the shareholders group, Mr. Boniface Solomon, described the deal as a very good one for the shareholders. He said the stock has really been struggling in view of the current realities in the nation’s economy, stating that the N24 per share is indeed a good price for his members.
Managing Director of Crown Flour Mills Limited, Anurag Shukia, said his company intends 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 shares held 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 Exchange; 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 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 enhance 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.
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