Some minority investors of Ardova Plc are disgruntled with the proposed delisting of the company, arguing that it’s not being done in compliance with market rules.
In a leaked letter addressed to the Nigerian Securities Commission (SEC) and NGX, as seen by Nairametrics, these investors contended that anytime corporations are delisted, they incur severe losses. They also emphasized the need for the NGX to offer greater details on investor protection.
More on their demands: These aggrieved investors want the Nigerian Exchange and the Securities and Exchange Commission to comply with section 131 of the Investment and Securities Act and rule 445 of the commission, which requires Ignite Investment & Commodities Limited to make a Mandatory Tender Offer to all minority shareholders for their shareholdings as well. According to them, the equality of shares guaranteed by CAMA could only be ensured in this way.
The disgruntled minority investors also concluded that the fair value for the buyout of the minority investors’ stock in Ardova Plc should be at least N66.00, not the N17.38 that the firm had suggested.
The Genesis: Ignite Investments & Commodities Limited had approached the Board of Directors of Ardova Plc with the intention to acquire the shares held by other shareholders of the company at an offer price of N17.38 per share. They plan to subsequently delist the company from the NGX after the proposed transaction.
According to them, the offer price of N17.38 represents a premium of 22.44% and 24.38% to the 30-day and 60-day volume weighted average share price of NB14.19 and N13.97, respectively, on 30 November 2022 (being the last trading day before the Offer).
What you should know: Recall that in July 2019, Ignite Investment and Commodities Ltd bought Mr Femi Otedola’s 74% share in Forte Oil Plc and renamed the business Ardova Plc. The cost to buy the shares was N 66.00 per share.
Just before this acquisition, the company’s former majority shareholder, Mr Femi Otedola, sold the company’s most valuable asset, the Geregu Power Plant, to himself as a majority stakeholder for N11.7 billion (See Note 8, Audited Financial Statement of 2019).