Champion Breweries Plc has launched a N15.9 billion Rights Issue, offering 994,221,766 new shares at a price of N16 per share to existing shareholders.
The offer is based on a one-for-nine basis, meaning for every nine shares currently held; shareholders are entitled to purchase one new share.
The offer opened on November 24, 2025, and will close on January 5, 2026.
The Rights Issue, which comes with a premium pricing, is to raise funds for the acquisition of the Bullet brand, a ready-to-drink beverage line.
Despite the higher-than-market offer price, the issue represents an opportunity for shareholders to gain exposure to Champion’s ambitious growth strategy.
But whether the acquisition and the funds raised will pay off in the long term remains a critical question
A bold move for growth?
With N15.9 billion in fresh capital, the company is aiming to tap into a lucrative segment.
The acquisition of Bullet could propel the company into the rapidly expanding ready-to-drink market, especially appealing to younger, health-conscious consumers; improving its bottom-line performance.
Champion Breweries has shown strong growth, with a 5-year CAGR of 39% and a 150% surge in 9M 2025 profit compared to 2024.
But is it the right time to invest?
The premium pricing and dilution question
The N16 per share offer price is above the qualification price of N15 and the current market price of N14.00, as well as slightly above the theoretical ex-rights price of N15.12.
This premium pricing might discourage investors, particularly those seeking immediate returns or concerned about paying more than the market value.
Dilution, a common concern with rights issues, also plays a key role.
Champion Breweries’ 9M 2025 profit of N2.05 billion is impressive; but will the Bullet brand provide the expected increase in profitability.
The new equity raise to fund the acquisition will naturally dilute earnings per share and the return on equity (ROE) unless Bullet generates additional profits.
To maintain its current ROE of 15.1%, the company would need to generate an additional N2.4 billion to N2.96 billion in profit; no small feat, even for a company with a solid growth track record.
The tailwinds – leverage:
The rights issue will significantly impact Champion Breweries’ financials.
The current debt-to-equity ratio is 0.99, indicating a relatively balanced leverage position. However, after the rights issue, the equity base will increase substantially, reducing the debt-to-equity ratio to 0.46, thereby lowering financial risk.
Investment case
Champion Breweries’ N15.9 billion Rights Issue appears to be a clear investment opportunity that should not be overlooked.
While there are concerns about premium pricing and short-term dilution, the potential upside from this rights issue and the strategic acquisition of the Bullet brand far outweigh these risks:
- One, the company has strong long-term and short-term profit growth. Given this strong track record, the company is in an excellent position to continue posting strong profit growth, which is essential.
- Secondly, the N15.9 billion being raised will be used to acquire Bullet, a well-known ready-to-drink beverage brand.
This acquisition is a strategic move that taps into the rapidly growing RTD (ready-to-drink) market, which is especially popular among younger, health-conscious consumers.
The RTD segment is growing fast, and Bullet’s brand recognition makes it a valuable addition to Champion’s portfolio.
- This acquisition has the potential to substantially increase revenues and expand market share, offering Champion Breweries a strong competitive edge in a booming market.
If Bullet performs as expected, this could transform the company, driving both top-line growth and profitability in the medium to long term.
Strong financial position post-issue
One of the most appealing aspects of this rights issue is the significant reduction in financial risk.
The company’s debt-to-equity ratio will fall from 0.99 to 0.46 post-issue, significantly reducing leverage and making Champion Breweries a much less risky investment.
A lower debt load provides the company with greater flexibility to reinvest in its growth and weather potential economic downturns.
Furthermore, the company is poised to be a more equity-backed post-issue, which provides long-term stability and room for growth. This is a big plus for investors who are looking for financial stability and growth potential.
Bottomline
This N15.9 billion Rights Issue is a strong buy for investors who believe in Champion Breweries’ growth potential and want to get in on the ground floor of an exciting acquisition.
The premium price is a short-term hurdle, but the long-term rewards from the Bullet acquisition make this a compelling investment opportunity.
