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•Reject N21/share acquisition offer
By Chinwendu Obienyi
Fresh crisis seems to be brewing within the investing community as shareholders of PZ Cussons Nigeria Plc on Wednesday, rejected the offer price of N21 per share being proposed by PZ Cussons (Holdings) Limited, the core investors over moves to acquire all the stakes of all other shareholders of the company.
PZ Cussons (Holdings) Limited, the major shareholder of PZ Cussons Nigeria Plc (PZCN), had proposed to acquire all the shares held by other shareholders of the company at a price of N21 per share. This proposed acquisition is subject to approval by the Board of PZCN, the company’s shareholders, and regulatory authorities.
However, shareholders who spoke to Daily Sun in a telephone interview in Lagos, described PZ Cussons’ proposed offer as inadequate. They also stated that the proposed price was too low and not reflective of the value they have contributed to the company over the years while expressing their concerns about the trend of bigger companies and multinational firms delisting from the Nigerian stock market. They believe this is indicative of issues within the market and the broader business environment.
The National Chairman, Progressive Association of Nigeria, Boniface Okezie, who spoke against the backdrop of the proposed acquisition in Lagos, described the business environment as hostile, adding that the government pay less attention to limited liability companies in terms of proper monitoring, which forces more firms to delist.
“I do not know the reason for them delisting in the first place because the goods that are manufactured and produced are used by Nigerians. There is no reason for delisting except the purchasing power has disappeared. They want to operate as a private company to avoid over taxation, and payment of regulatory dues.
And l blame the government for these delistings as they have failed to provide the enabling environment for these corporates. Double taxation is their worry and things are yet to get better under the present administration”, Okezie said.
According to him, since the holding company wants to stop paying dividends to shareholders, it is only right that shareholders are compensated adequately.
Also commenting on the development, the National Coordinator, Independent Shareholders Association of Nigeria (ISAN), Moses Igbrude, also said the situation where big companies and multinational companies are delisting from the market is a fundamental flaw in the market and raises concerns and questions need to be asked.
“There is something going on that we do not know. This is what SEC, NGX, and other regulators need to solve. It is becoming unbearable and if there is no quick or gradual fix, then more companies will still delist. The operating environment has been harsh and it has become an anthem now by Directors when we go for AGMs, this just means our government is not helping matters”
Igbrude noted that there should be clear and spelt-out incentives for listed companies, adding that one of the major issues in the country is that limited companies have more leverage than listed firms either in terms of taxation or other requirements. “I remember when companies who wanted to list had a no-tax incentive. Now that has gone, there is a need to look at another incentive or even continue with the no-tax incentive”, He said.
According to him, an offer price of N21 per share for minority shareholders is not encouraging and not acceptable. He said, “Over the years they have used our money to grow the business and they are now offering us peanuts; it is not acceptable”.
PZ Cussons Nigeria is currently the 36th most valuable stock on the NGX with a market capitalisation of N75.8 billion, which makes up about 0.203 per cent of the Nigerian equities market. Its share price at the end of trading yesterday stood at N19.05 per share.
