Oil palm giant Presco’s shares has rallied 10% today, the highest it can gain for the trading day, as investors react to the news of the proposed acquisition of SIAT Nigeria Limited (SNL), for N21 billion cash.
Yesterday, Nairametrics reported that Presco, which operates in the agricultural industry and specializes in crop production, palm plantation and processing, proposed to acquire SNL, a company that also operates in the agricultural industry and deals in palm oil production, in a bid to bolster the company’s operations.
Presco is looking to boost its production capability and market share with this acquisition as the announcement states that the proposed acquisition is part of the company’s strategy to “drive sustained long-term growth and profitability for the company.
What you should know
- Presco started the trading session at N104.5 and immediately went on a bid, pushing the price to the highest possible gain for the day, 10%, to currently stand at N114.95 a share, a 52-week high, with no daily low recorded.
- For the day, 1.4 million Presco shares were traded, representing a value of N157.5 million. The volume of shares traded today represents a significant increase of 357.60%, when compared to the 300,495-volume traded in the previous trading session.
- According to the announcement, the proposed acquisition was brought about due to SNL’s recent acquisition of the assets of Risonpalm, a palm oil plantation that is comprised 16,000 hectares of old palm plantations, as well as the entire social and industrial infrastructure of the industrial oil palm complex from the Rivers State Government.
- SNL has a total planted area of 15.215 ha, with 51% thereof being plantings of between 1 and 5 years old. The management of SNL expects strong revenue growth from FY21 to be driven by increased yields of fresh fruit bunches and oil extraction rates from the recent replantings of the oil palm plantations in Elele and Ubima estates.
Also weighing in on the price is Presco’s notice of board meeting which the company intends to discuss the approval of the audited financial statement, approval of its proposed dividend payment and also discuss the issue of bonus shares. The meeting is expected to hold on the 23rd of March 2022.
