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Oando Plc has announced that it received an offer from its majority shareholder, Ocean and Oil Development Partners Limited to buy out all minority shareholders in the company OODP which currently holds 57.37% shareholding in the company.
Subsequently, the company plans to be taken private and would delist from both the Nigerian and Johannesburg stock exchanges.
The offer is being made at a price of N7.07 (or its equivalent in South African Rand) to all eligible minority shareholders (scheme shareholders).
This represents a 30.93% upside to the closing price as of 30th March, 2023 (N5.40). The buy-out offer is subject to the approval of the scheme application by the Securities and Exchange Commission (SEC).
Recall that in March 2021, some minority shareholders in OANDO filed a petition, requesting a buyout of their entire shareholding in OANDO by OODP.
“We consider the proposed buy-out price of N7.07 attractive for existing scheme investors, as it represents the highest price the stock has traded in 5 years. Thus, we advise existing shareholders to take the offer, as key decisions regarding the business will be at the discretion of the majority shareholder after delisting,” Meristem Securities analysts said.
“Also, we note a possible time lag of up to seven months before approval is granted by the SEC for the buyout given precedence of similar transactions of COURTVILLE and CHAMPION. Thus, for intending investors, we recommend cautious trading on the stock as no clear guidelines were communicated.”