Insurance company International Energy Insurance PLC (IEI) has announced it has received a mandatory takeover bid from Norrenberger Advisory Partners Limited (NAPL).
According to information published on the website of the Nigerian Exchange Limited, Norrenberger Advisory Partners Limited aims to acquire up to 634,212,476 ordinary shares from other shareholders of the Company.
This announcement culminates a transaction that started in 2021, after Norrenberger obtained approval from the insurance regulator NAICOM to acquire 100% of IEI.
Norrenberger Advisory Partners is part of the Norrenberger Group, a fast-growing integrated financial services group with assets across Asset Management, Pension, Insurance, and Investment Banking.
Mandatory takeover
According to the press release on the NGX, the Company stated that NAPL had completed the acquisition of 649,873,013 ordinary shares, representing a 50.61% equity stake in the Company.
This acquisition establishes NAPL as the largest and majority shareholder in the Company, thereby triggering the Mandatory Takeover Offer (MTO) provisions under the Investment and Securities Act and the regulations of the Securities and Exchange Commission (SEC).
Information contained in the 2023 audited accounts of IEI reveals that NAPL was the single majority shareholder of the insurance firm, with no other shareholder holding up to 5%. About 49% of the Company’s shares were listed as ‘free float,’ indicating they were held by diverse shareholders.
Following this acquisition, the SEC granted the “Authority to Proceed,” allowing NAPL to move forward with its takeover bid.
NAPL has expressed its intention to acquire an additional 634,212,476 ordinary shares, equivalent to a 49.39% equity stake, from other shareholders at a price of N1.60 per share.
IEI closed the week at a share price of N1.53, representing a 7% gain as investors reacted positively to the mandatory takeover bid. The stock is, however, down 9.5% this week despite being up 10% year-to-date.
This places the entire transaction value at around N1 billion, giving IEI a market cap of N2 billion, even though the deal will likely lead to the delisting of IEI.
The mandatory takeover bid, once completed, will consolidate NAPL’s control over International Energy Insurance PLC, potentially influencing its operational strategies and market positioning.
The deal is not yet completed, as it will depend on the minority shareholders of IEI approving the offer price of N1.60 per share.
IEI financial status
Insurance company IEI currently has a negative shareholders’ fund of N7.7 billion and total assets of N19.5 billion.
The company’s shareholders’ fund is decimated by an accumulated loss of over N22 billion, making it impossible to pay dividends until the balance sheet is restructured.
The company reported a profit after tax of N5.5 billion on the back of a loan write-back of N3.4 billion at the end of its financial year.
The insurance company reported a pre-tax loss of N1.6 billion at the end of the first quarter of 2024.
Norrenberger Group has, over the years, established itself as a fast-growing integrated financial services firm that has achieved considerable growth via acquisitions. The company is expected to turn around the fortunes of IEI after taking it private.
Backstory
Norrenberger Advisory Partners Limited first announced this deal in late 2021 after it received the nod of NAICOM for a 100% acquisition of the insurance firm.
IEI stated at the time that the deal was in line with its plans to meet the recapitalization requirements as directed by the insurance industry regulator.
Norrenberger also required the approval of the Federal Competition and Consumer Protection Commission (FCCPC) and the Securities and Exchange Commission (SEC) for the acquisition.
