Ellah Lakes Plc has put forward one of the boldest proposals in Nigeria’s agro-industrial market this year: a public offer of 18.8 billion shares to raise N235 billion for the acquisition of Agro-Allied Resources & Processing Nigeria Ltd (ARPN).
The offer opened on 10 November 2025 at N12.50 per share and will close on 5 December 2025.
The share price climbed from N11.05 on the opening day to N13.85 last week, reflecting growing optimism about what the acquisition might unlock.
If fully subscribed, the entire proceeds will be used to acquire ARPN, a business with expansive landholdings, integrated mills, and growing operations in the palm oil and cassava value chains.
The strategic question is simple: Is this the breakthrough for Ellah Lakes or a high-stakes bet riding on future promise?
The appeal is clear. ARPN appears good for Ellah Lakes: a functioning agro-industrial operation with scale, assets, and cash flow.
Its last twelve-month revenue stands at N1.62 billion, and N335 million in profit.
It controls over 22,000 hectares of land, has processing infrastructure in place, and maintains supply relationships, most notably with Dufil Prima Foods, one of the largest FMCG groups in Nigeria.
If the acquisition goes through, Ellah Lakes’ revenue base would expand more than twentyfold.
On a combined basis before the public offer proceeds, total assets rise to about N81 billion, while debt remains minimal at under N500 million.
The public offer will change Ellah Lake’s profile.
The commercial upside is significant. ARPN is forecast to deliver N2.25 billion in tax-adjusted EBIT and N2.74 billion in free cash flow by 2026, with revenue projected to reach N76 billion by 2030.
Its vertical integration from plantation to processing reduces operating costs and improves yield consistency. With ARPN, Ellah Lakes gets not just land but a working machine.
ARPN looks like the right kind of business for Ellah Lakes to buy. It has land, mills, and real operations that are already generating cash. But the harder part is the valuation.
ARPN is priced at a little over N200 billion, a figure that assumes the company will grow quickly, maintain strong margins, and complete its large 30MT/hr mill on time.
Yes, ARPN became profitable in 2025, but it is still an early-stage operation, and the price reflects a lot of optimism about its future.
Yes, ARPN became profitable in 2025, but it is still an early-stage operation, and the price reflects a lot of optimism about its future.
There is also the cost of capital to consider.
However, when you blend ARPN’s high cost of capital with Ellah Lakes’ lower 15.5%, the combined group still ends up with a cost of capital of about 22%.
That is a tough benchmark. It means the merged company must grow fast and perform exceptionally well just to justify the amount being paid.
If the business falls short, slower expansion, weaker margins, delays in operations, and shareholder value could be eroded rather than created.
In short: the deal makes strategic sense, but the price and performance expectations leave very little room for mistakes.
Looking at its valuation, investors are not paying for what Ellah Lakes is today; they are paying for what they hope it will become.
That is why the ARPN acquisition is not just strategic; it is essential.
Without ARPN, Ellah Lakes’ valuation looks stretched. With ARPN, the story starts to make sense.
The strengths are persuasive. ARPN brings scale, profitability, assets, and operational depth.
The combined balance sheet becomes one of the strongest in the sector, and the acquisition provides Ellah Lakes with the industrial backbone it has long lacked.
For long-term investors looking for exposure to agriculture with real infrastructure and expansion potential, this deal creates a new, credible platform.
But the risks are substantial. ARPN’s valuation assumes ambitious growth. The blended cost of capital means the company must deliver exceptional performance to justify the acquisition.
Integration may be complex: plantations, mills, logistics, labour, compliance, and climate-sensitive operations will all need disciplined management. Agriculture rarely goes exactly to plan.
This offer is not a safe, defensive play. It is a bold, high-conviction bet.
With a high of N17.66, the stock has traded at much higher levels before, which gives investors psychological comfort.
This upside, however, is only realistic if the offer is fully subscribed to and completed successfully.
The N12.50 offer price can hold and may even see further short-term gains, but sustaining that premium over the long run depends entirely on whether Ellah Lakes can deliver on the ARPN promise and turn the acquisition into real operational performance.