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Wednesday, 24 April 2019 05:49

Dangote offers to sell Flour Mills for N130bn

Dangote offers to sell Flour Mills for N130bn
 

 

Africa’s richest man, Alhaji Aliko Dangote, has offered to sell one of his firms, Dangote Flour Mills (DFM) Plc., to a Singaporean agro-allied company, Olam International Limited, for N130 billion.
The deal is part of the company’s strategy of strengthening its portfolio by investing in proven businesses that have consistently performed and gained market leading position.

As part of the purchase, it is expected that DFM’s five strategically located facilities within flour and pasta manufacturing are to be included, as well as its logistics capabilities, including access to the ports of Apapa and Calabar.
 

In a notice to the Nigerian Stock Exchange, obtained by New Telegraph yesterday, Dangote Flour Mills Plc. said that the total consideration offered by Olam to acquire its five billion shares was N130 billion.
Olam, through its subsidiary Crown Flour Mills, currently holds over five million shares of Dangote Flour Mills and is bidding to take over the entire company.

 

It noted that Olam was bidding to acquire all the outstanding and issued shares of DFM that were not currently owned by Olam through its subsidiary, Crown Flour Mills Limited.
The notice, signed by Mr. Thabo Mabe, a director, said that the transaction would be on the basis of debt free, cash free, payable in cash at the closing of the proposed transaction.
The deal, according to Dangote Flour, means working capital and debt value would be net out at the end of the transaction.

“If the conditions of the transactions are satisfied and sanctioned by the court, the company would be delisted from NSE,” it said.

 
 

The company said that the offer was subject to, amongst other things, shareholders’ approval, regulatory approvals, the sanctions of the Federal High Court.
Dangote Flour Mills said that the board would review the offer in the best interest of the shareholders.

“The board will keep both the capital markets and the public updated on tangible development in this regard, in line with the applicable regulatory requirements,” it added.
Olam was established in 1989, and now listed on the Singapore Exchange and the bids could be a move by the firm to expand its franchise in Nigeria.

It would be recalled that Tiger Brands, a South African firm had, in 2012, bought a 63 per cent stake in Dangote Flour and pasta maker, but in 2015 the Dangote Group bought back the company after the new owners sustained losses repeatedly on its operations.

Dangote Flour Mills, in which Tiger Brands bought a 63 per cent stake in October 2012, had placed a major drag on the group’s earnings in its year ended September 2013 – for which it reported a 3.8 per cent decline in headline earnings per share.

It would be recalled that two years ago, the management of Dangote Noodles Limited, one of the subsidiaries of Dangote Group, also sold two of its production lines in Ikorodu and Calabar to De United Foods, makers of Indomie noodles for N3.75 billion.

De United said it signed an agreement with Dangote Noodles to buy the plants as well as an intention to also buy stock worth N383.94 million.

The deal came after Dangote sold a small stake in its cement business to foreign investors in a one-off stock market deal valued at N27 billion.

Dangote Flour Mills said it wanted to quit noodles manufacturing to focus on pasta and flour production.

 

Dangote Group has interests in manufacturing, refinery, agriculture, real estate and truck assembly.

 

 

NewTelegraph

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