Flour Mills of Nigeria has announced that its majority shareholder, Excelsior Shipping Company Limited, has offered to acquire all shares held by minority shareholders, a move that could result in the company’s delisting from the Nigerian Exchange (NGX).
The company made this disclosure on the NGX platform on September 24, 2024, just days after its stock price surged by 22% month-to-date in the third week of trading.
According to the announcement, the acquisition proposal has already received a “no objection” ruling from the Securities and Exchange Commission (SEC), positioning the company for an imminent exit from the Nigerian stock market.
The proposed divestment is outlined under Section 715 of the Companies and Allied Matters Act (CAMA) 2020. Under the scheme, any outstanding shares not currently held by Excelsior Shipping Company Limited will be transferred to the majority shareholder.
To streamline the process, Flour Mills has announced that its register of members will be closed from September 25 to September 27, 2024.
The move to buy out minority shareholders of the company adds fuel to recent rumours of a potential delisting, which have been circulating for weeks.
While Naijaonpoint cannot confirm if this will lead to a delisting, our findings suggest the company may be considering a transition to a holding company (HoldCo) structure. However, buyouts of this nature often signal a path towards delisting.
In recent weeks, speculation among traders suggested that Flour Mills, one of Nigeria’s largest consumer goods companies, might be preparing to delist from the Nigerian Exchange. The release of new information, however, points to a more strategic move rather than a straightforward delisting.
The Scheme of Arrangement proposed by Excelsior is a strategic move that would result in the consolidation of ownership under the majority shareholder.
Despite the uncertainty, Flour Mills has seen its share price rise by 22% month-to-date as of mid-September.
While it remains unclear if Flour Mills will eventually delist, the acquisition of minority shares and the potential shift to a HoldCo structure suggest that significant changes are underway.