Dangote in N124bn shares divestment deal
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Dangote in N124bn shares divestment deal



Dangote in N124bn shares divestment deal

Barely a week after crossing a N23.12 billion shares deal, Dangote Cement was again on Monday, a subject of a cross deal for partial divestment valued at N124.12 billion.

The shares were believed to be part of sale by Dangote Industries Limited (DIL), the investment holding company of Nigerian billionaire and Africa’s richest man, Alhaji Aliko Dangote.

A cross deal was struck for exchange of 549.98 million ordinary shares of Dangote Cement at N225.68 per share at the Nigerian Stock Exchange (NSE). The deal was done as an off-market, negotiated deal.

The deal represented about 3.23 per cent equity stake in Africa’s largest cement producer and Nigeria’s most capitalised quoted company.

Last week’s Tuesday, investors had staked N23.12 billion on 94.7 million shares of Dangote Cement. Two cross deals were struck on Dangote Cement for the Tuesday’s transactions. The transactions represented 0.56 per cent of the total issued share capital of 17.04 billion ordinary shares of 50 kobo each of Dangote Cement.

Transaction details had indicated that a cross deal was struck for 22.625 million ordinary shares of 50 kobo each at N241.50 while another cross deal was struck for 72.071 million ordinary shares of 50 kobo each at N245 per share.

Foreign investors from Dubai, United Arab Emirates (UAE) had in November 2017 struck a deal for 128.99 million shares of Dangote Cement valued at N27 billion. The November 2017 transaction came barely three months after some foreign investors bought 2.3 per cent stake in Dangote Cement with N86.1 billion for 416 million shares.

Earlier, two other foreign investors had bought into Dangote Cement. In 2013, South Africa’s Public Investment Corporation (PIC) bought 1.5 per cent for $289.3 million. Similarly, in 2014, Sovereign fund Investment Corp of Dubai (ICD) acquired 1.4 per cent for $300 million.

The deals are usually done as an off-market, negotiated cross deal, thus they are not subjected to the dynamics of price discovery for the particular period. Off-market trade implied that the deal was sealed outside the floor of the NSE.

Read Also : Again, Dangote accuses BUA of stealing, illegally mining limestone on its properties
The negotiated cross deal platform of the Exchange is a special-purpose trading platform that is meant for voluminous transaction. By the cross deal, it implies that the buyer and the seller had been prearranged and the transfer at the stock market was a mere perfection of the agreement between the two. The negotiated cross deal allows the parties to the deal to close the deal at reduced cost.

Dangote Industries Limited (DIL), the majority core investor in Dangote Cement Plc, plans to sell shares valued at more than N200 billion in a partial divestment that will widen the float for Dangote Cement. DIL is owned by Africa’s richest billionaire, Alhaji Aliko Dangote and it owns more than 90 per cent majority equity stake Dangote Cement, Nigeria’s most capitalised company.

A media report had indicated that Dangote Cement had secured regulatory approval for block divestment of 852.03 million ordinary shares of 50 kobo each. The block divestment represents 5.0 per cent of the issued share capital of Dangote Cement. Dangote Cement accounts for more than 30 per cent of the total market capitalisation of quoted equities.

DIL plans to undertake the block sale in tranches and that the sale of 416 million ordinary shares in the third quarter of this year was the first tranche of the N200 billion divestment. About 2.44 per cent equity stake in Dangote Cement was swapped under pre-arranged transactions earlier this month. A report on the transactions indicated that six deals were struck for the transfer of 416 million ordinary shares of 50 kobo each at a below-the-market price of N210.

South African government had in June 2013 bought into Dangote Cement. The South Africa’s government, through its wholly owned investment company, Public Investment Corporation of South Africa (PIC), had acquired 1.5 per cent equity stake in the Nigerian cement group to emerge the second largest equity investor.


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