The ranks of companies delisting from the Nigerian Stock Exchange may increase as Continental Reinsurance Plc has sent a notice to the Nigerian Stock Exchange announcing a proposed acquisition.
According to the notice
“The Board of CRe Nigeria has received an offer from CRe African Investments Limited (CRe Investments), to acquire all the outstanding and issued shares of CRe Nigeria. CRe Investments is making this offer in order to initiate a much needed restructuring exercise for CRe Nigeria, with a view to consolidating the CRe Nigeria’s operations and repositioning it for enhanced competitiveness in the global insurance market.”
How much is the company offering?
CRe Investments is offering N2.04 per share for the 10,372,744,314 ordinary shares of 50 kobo each, for the shares it does not own.
The proposed Scheme Consideration represents a 46.76% premium to the last traded share price of the Company on October 5, 2018, being the last business day prior to the date the proposal was received from CRE Investments and a 36.00% premium on the trading price as at close of the last business day; November 19, 2018
Are there other options?
Shareholders unwilling to sell their shares also have the option of receiving 1 CRE African lnvestments Ltd shares for even; 176 CRE Nigeria share held as at the Effective Date.
When is the court ordered meeting?
The Meeting during which minority shareholders will be given the option of accepting or declining the offer will be held on the 20th day of December 2018 at the Victoria Crown Plaza Hotel, 292B Ajose Adeogun Street, Victoria Island, Lagos at 10:00 am, at which place and time all the aforesaid shareholders are requested to attend.
The register of members will be closed from November 28, 2018, to November 29, 2018 (both dates inclusive) for the purpose of determining; the distribution of the Scheme Document.
Why a delisting may be inevitable
Similar events in the past show most likely would end with the majority shareholder having its way. Retail investors would prefer to cash out their holdings, in view of the substantial markup to the company’s current share price.
In the event of shareholders accepting the offer, the company would be delisted from the Nigerian Stock Exchange, having been wholly acquired by the CRe Investments
About CRe Investments
C-Re Holding the majority shareholder is 49% owned by Capital Alliance Private Equity IV Limited, a private equity fund sponsored by African Capital Alliance (ACA). The remaining stake is held by Saham Finances SA (the insurance arm of Saham Group).
About CRe Nigeria
Continental Reinsurance (the company) was established in 1985 and listed on the Nigerian Stock Exchange (NSE) in 2007. It has operations in 44 African countries, with its main offices in Nigeria, Kenya, Cameroon, Côte d’Ivoire, Tunisia, and Gaborone.