Products of Champion Breweries Plc used to demonstrate the story.
Akwa Ibom Investment Corporation is the biggest obstacle hindering the mandatory takeover of minority shares of Champion Breweries Plc by Raysun Nigeria Limited, a fully-owned subsidiary of Heineken NV.
The Dutch company holds 84.7 per cent (6,632,918,000 shares) in Champion Breweries but moved to take over the company 100 per cent in 2021 through a Mandatory Takeover Offer (MTO).
The total share capital of the Akwa Ibom State-based Champion Breweries is 7,829,496,000.
On 2nd January 2022, the Securities and Exchange Commission (SEC) gave authority to Raysun to proceed with the Mandatory Takeover, for the 1,196,799,164 minority shares of the Company at N2.60 per share.
Asides from Raysun who is the core investor, Akwa Ibom Investment Corporation holds 10.1 per cent shares or 787,407,000 ordinary shares.
Other minority shareholders held 5.2 per cent or 409,171,000 shares as of 2021 when the takeover move was initiated.
Under the aegis of the Progressive Shareholders Association of Nigeria (PSAN), the minority shareholders kicked against the takeover.
They accused the SEC of working against the interest of minority shareholders.
“The core investor has sought an MTO of Champion Breweries Plc, which may result in the eventual delisting of its shares, a position we feel is detrimental to the interest of the minority investors.
“It is also our understanding that SEC approved the MTO without a tender paper indicating the approved buy-back price and other relevant details of the transaction. In the same vein, the NGX’s free float regulations require a minimum local ownership which appears not to be obtainable in the current ownership structure,” the minority shareholders alleged.
Details analysed from the financial records of Champions Brewery show that since the approval of the MTO, Raysun has only successfully purchased 128,365,129 units out of the 1,196,799,164 minority shares but not the shares of Akwa Ibom Investment Corporation.
As of December 2022, it stakes had increased to 86.4 per cent or 6,761,283,000 shares.
Currently, other minority shareholders now have 3.5 per cent shares, down from the 5.2 per cent (280,806,000) stake held before the MTO.
Akwa Ibom Investment Corporation has not yielded as it still maintains its 10.1 per cent shareholding.
“Based on the MTO, Raysun Nigeria Limited acquired additional 128,365,129 ordinary shares from the minority shareholders,” the brewery said in its 2022 financial records.
Culled from The Whistler.