Business Day reports Some shareholders of Cadbury threatened to sue Cadbury Nigeria Plc over the company’s plan to embark on share capital reduction.
The shareholders, under the aegis of the Progressive Shareholders Association of Nigeria (PSAN), made the threat in an interview with the News Agency of Nigeria in Lagos.
The minority shareholders said that the resolutions passed at the company’s extraordinary general meeting (EGM) on December 19, 2013 breached corporate governance and remain an antithesis to the growth of the nation’s capital market.
Mr Boniface Okezie, PSAN President, said that the minority shareholders would only accept capital reduction based on the prevailing market price of Cadbury shares. According to him, he declined to vote because the offer price of N9.50, as against the N58.27 market price of Cadbury was a serious disincentive to both investors’ and the market.
“We have endured without dividend for years when the company had problems and should not be maltreated.
The company should not take retail investors for a ride as the majority investors have no right to vote at the meeting. he said”
I believe the shareholders maybe confusing Capital Reduction to a share buyback. The company planned N9.5 price is based on a fixed return amount of about N12b and can’t be returning same based on market price.
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