Seplat Energy’s share price is down 6% in mid-day trading, following the decline by the Federal Government to approve the $1.8 billion acquisition of the entire share capital of Mobil Producing Nigeria Unlimited from Exxon Mobil Corporation.
As of the close of business on Thursday, the company’s share price fell 6.16% making it one of the major losers for the week. The share price was also down 4.44% on the London Stock Exchange.
According to data tracked by Nairametrics, the company’s recorded a volume of 336, 592 closing at a share price of N1,220. Seplat’s previous close was N1,300.10. The decline has wiped about N23.6 billion off its market value which is now N360.9 billion.
Why the drop?
- The drop in Seplat’s share price may be connected with the revelation that the Federal Government had declined to approve the planned acquisition of Mobil Producing Nigeria Unlimited.
- According to reports, the government in its formal response attributed its decision to reject the deal which was first announced almost 3 months ago, to overriding national interest, among other reasons.
- “We also note that MPNU failed to follow the procedure for assignments laid down in the Guidelines by not providing the requisite notices to the Commission at all relevant stages of the transaction. Even if the transaction has been between Seplat Energy Offshore Limited and the MPNU shareholders, the responsibility to ensure compliance with Nigerian laws, rules and regulations always remains that of MPNU, the entity that was awarded the assets. We regret to inform you that His Excellency, the Minister of Petroleum Resources has declined his consent to the transaction.
Meanwhile, Seplat’s share price is up 82% in the last year. The company’s positive outlook has helped its share price soar making it one of the most performing stocks on the stock exchange.