Champion Breweries shares nosedived by as much as 33.5% in four trading sessions on NSE, at the back of profit-taking activities and sell-off of the shares of the company, as wary investors exit their positions in the local brewer.
Checks on the website of the Nigerian Stock Exchange at the close of trading activities today, the 8th of February 2020, revealed that Champion Breweries shares have slumped by 33.51% to N2.50, when compared with N3.76 recorded at the close of trade on the 2nd of February 2021.
As of the close of trading activities on the Nigerian Stock Exchange on the 2nd of February, it is essential to understand that Champion Breweries year to date gain stood at 337.21%
However, with the recent streak of declines in Champion breweries’ share price, the brewer remains the best performing stock on NSE, with a year-till- date gains of 190.70%
What you should know
- The rally in the shares of Champion Breweries, however, before the recent decline was largely driven by Heineken’s acquisition of additional 1,903,609,538 ordinary shares of Champion Breweries, at a price of N2.6 per share through its wholly-owned subsidiary, Raysun Nigeria Limited.
- The acquisition of the brewer’s shares by Raysun Nigeria Limited at a total purchase consideration of N4.959 billion representing 24.3% stake in Champion Breweries, increased the ownership stakes of Heineken’s SPV in the local brewer to 84.7%.
- This change, occasioned by the acquisition puts Heineken in a position to launch a takeover bid, through its Special Purpose Vehicle (SPV), Raysun Nigeria Ltd.
- With the acquisition done at N2.6 per share on 7th January 2021, while the shares of the company were trading at N0.93 per share, investors on the Nigerian Stock Exchange were convinced Champion Breweries shares were undervalued.
- This ruling sentiment on the local bourse led to a scamper for the shares of the company. This also led to the sporadic increase in the share price and the market capitalization of Champion Breweries.