•Shareholders kick against N1.03b buy-out deal
FBN Insurance is offering 55 kobo per share to buy the remaining 1.87 billion shares it requires to own Oasis Insurance. Shareholders describe it as hostile bid.
Bisi Onasanya, FBN Group MD/CEO.
FBN Insurance, jointly owned by Nigeria’s FBN Holdings and South Africa’s Sanlam, acquired 71.2 per cent stake in Oasis in February, and if another deal of 28.8 per cent minority stake worth N1.03 billion is finalised this week, that will see the investors acquire the local underwriters.
A statement issued by FBN said the buyout process will open on Thursday, July 10 and will last for three weeks, after which FBN will delist Oasis from the Nigerian Stock Exchange (NSE).
Shares of FBN, a motor and fire insurer, traded at 50 kobo per share on July 3, giving it a market capitalisation of N4 billion.
But shareholder groups faulted the pricing, saying it was not quite good for investors whose stake in the company has never been rewarded.
FBN’s acquisition of 71.2 per cent in Oasis gave Sanlam an entry point into the general insurance sector in Nigeria, Africa’s most populous nation, but the move may be punctuated as shareholder groups conveyed their dissatisfaction immediately the news broke.
Independent Shareholders Association of Nigeria (ISAN) Chairman, Sonny Nwosu, described the buyout plan as ridiculous. He argued that any price offer to existing shareholders lower than N2 per share is unacceptable.
He explained that in a buyout deal where new investors want to quit the NSE, the buyout price offer has to be mouth watering enough to compensate minority shareholders who are not prepared to exit the company yet.
Nwosu urged the National Insurance Corporation of Nigeria (NICON) to protect the interest of shareholders of Oasis because the Securities and Exchange Commission (SEC) and the NSE are helpless to protect shareholders’ interest when it comes to delisting from the bourse.
A senior dealing member of the NSE, who pleaded not to be named, said much as there is room for improvement on the exit price for existing shareholders, insurance stocks have been a pain in the neck of investors and advised shareholders to offload an otherwise bad investment.
He was unhappy that South African entities in Nigeria have not been fair to the shareholders, lamenting that they only come to cheat minority investors.
He cited some companies from South Africa that listed shares only to delist after a few years, leaving shareholders in the lurch.
Minority shareholders have been at the receiving end of bad treatment by companies quoted on the NSE whether in delisting shares, shares reconstruction, or outright liquidation of a quoted company.
The NSE has pencilled 21 companies for delisting in the weeks ahead. With the addition of Oasis Insurance, the number rises to 22.
Others to be yanked off include Daar Communications, Starcoms, FTN Cocoa, UTC, Big Treat and Capital Oil.
