Ignite Investments’ latest 0.04% proposed equity stake in Forte Oil has been likened to a plan to delist the oil company from the Nigeria Stock Exchange. The investment could take Ignite’s Prudent Energy from 74.02 to 74.06% equity stake, experts have argued.
Recall that it was barely three months Prudent Energy Services Limited bought Forte Oil from the Nigerian billionaire, Femi Otedola, that it proposed another 0.04% stake increase. A market operator said this move would help Ignite increase its stake in the company.
The offer: Ignite, the investment arm of Prudent Energy was planning to take over 500,000 ordinary shares which represent a 0.04% equity stake in Forte. The additional shares would be purchased at the rate of N66.25 for each ordinary share, which results to N33.13 million take-over payment. Currently, Prudent Energy owns 970,166,694 Ordinary Shares.
Explaining the latest offer, the Chief Operating Officer, InvestData, Mr Ambrose Omoriodon said the move was in order.
“The move by Ignite Investment is to carry along with other shareholders after acquiring the majority stake by buying off Femi Otedola’s holdings to own 74.02% which it intends to increase its holding to 74.06% by this takeover offer and that is in line with regulatory order. Forte Oil offering of 500,000 ordinary shares at N66.25 is in order since it is through tender, meaning people will tender and accept a percentage to cover the 500,000 units no matter the number of units tendered.”
The Head of Investment and Research at FSL Securities, Mr Victor Chiazor said the move abides by the regulatory requirement backed by the law.
“The tender offer to minority qualifying shareholders of Forte Oil by Ignite Investment and Commodities Limited for the acquisition of 0.04% (500,000 units) of Forte Oil shares at the same unit price of N66.25 paid to acquire the majority stake in the company, is a regulatory requirement by the Securities and Exchange Commission, SEC, following the company’s earlier purchase of a majority stake in Forte Oil.
“Going by SEC (“ISA”) Rules 445 – 448, part of which states that (where a person or group of persons acquire(s) or wishes to acquire a minimum 30% shares in a public quoted company with the intention of taking over control of that company, a takeover bid shall be made by such person or group of persons or through their agent to the shareholders of the target company). A similar mandatory bid of about 3.23% to minority shareholders was made by 11 Plc after their purchase of majority stake in Mobil Plc.”
However, the proposed takeover bid is still awaiting the regulator’s approval since it has not been formally launched. Last weekend, Forte Oil told its shareholders and other stakeholders that the proposed takeover offer by Ignite Investments to other shareholders of Forte Oil was still under review by the relevant regulators and had not been formally launched.
“As such, shareholders are advised to take no action in respect of the proposed offer at this time. Shareholders will be appropriately notified in line with regulatory requirements by Ignite Investments of the formal launch date,” the Acting Company Secretary of Forte Oil, Oladeinde Nelson-Cole, said.