The possibility of minority shareholders of Mobil Oil Nigeria Plc more than doubling their current value of shares is becoming more of a reality as the days roll by. This is due to a combination of the share value of Mobil Nigeria on the floor of the Nigerian Stock Exchange and more importantly, the acquisition of ExxonMobil Oil Corporation’s 60 per cent majority equity stake in the company by Nipco, a deal worth $301 million or N91.88 billion at the official exchange rate.
The terms of the deal dictate that in exchange for the above sum, ExxonMobil will sell its majority equity stake of 60 per cent to Nipco Investments Limited, consisting of its total shareholding of 216.36 million ordinary shares of 50 kobo each to Nipco Investments Limited for the consideration of $301 million.
A quick calculation shows that this translates to about N425 per share which is 129% higher than the share price of N186 as at the date the deal was announced. However, market forces have seen the value of Mobil’s shares to appreciate to N280 per share.
Since the extant laws at the capital market requires Nipco make a similar offer to the minority shareholders of Mobil Oil Nigeria Plc., any minority shareholder who decides to divest his/her shares will be reaping a 129% profit on the value of the shares as at deal date. However, if the upward turn of Mobil’s share price continues, the margin will continue to reduce. At the current share price of N280 though, this translates to a 51.8% profit margin.