Diageo in N41b bid for 70% equity stake in Guinness Nigeria

Diageo Plc, the parent company of Guinness Nigeria Plc, yesterday (Wednesday) announced that it plans to acquire additional equity stake to increase its majority equity stake in Guinness Nigeria to a ceiling of 70 per cent.
In a regulatory filing at the Nigerian Stock Exchange (NSE) yesterday, Guinness Nigeria said Diageo has approached the Nigerian company with an intention to make an offer to increase its equity stake in Guinness Nigeria from 54.3 per cent to a maximum of 70 per cent.
Diageo, through its wholly-owned subsidiary-Guinness Overseas Limited; plans to purchase up to 236.18 million ordinary shares of 50 kobo each in Guinness Nigeria at a maximum price of N175 in a deal worth more than N41.3 billion . Diageo will maintain Guinness Nigeria’s listing on the NSE. Guinness Nigeria yesterday notified the NSE of Diageo’s approach.
Subject to receiving regulatory approval and if Diageo decides to proceed with the proposed transaction, Diageo, through its wholly owned subsidiary Guinness Overseas Limited, will launch a partial tender offer at a price not higher than N175 per share in cash, giving all shareholders the opportunity to elect to sell some or all of their shares in Guinness Nigeria.
At the maximum offer price of N175 per share, the proposed offer would represent a premium of 36 per cent to the 30-day volume weighted average share price and 40 per cent to Guinness Nigeria’s closing share price on September 8, 2015. Guinness Nigeria currently has 1.506 billion ordinary shares in issue.
In spite of the downtrend at the stock market that saw quoted equities losing N312 billion yesterday, Guinness Nigeria’s share price rose by 5.0 per cent or N6.26 to close higher at N131.48 per share.
Guinness Overseas also stated that it may seek to acquire shares in the open secondary market at a price not higher than the offer price of N175 per share while encouraging those shareholders that wish to divest their holdings in Guinness Nigeria to make contact with Stanbic IBTC Stockbrokers Limited.

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The proposed partial tender offer will be subject to requisite regulatory approvals, including those of the Nigerian Stock Exchange and the Nigerian Securities and Exchange Commission. The formal offer documentation will be posted to shareholders as soon as these approvals are obtained.
The company however noted that the announcement yesterday of Guinness Overseas’ intention to make an offer does not constitute the announcement of an offer and creates no obligation on Guinness Overseas or Diageo to make an offer.
It advised shareholders of Guinness Nigeria to be cautious as there can be no certainty that any offer will be made, nor as to the price or terms of any offer that may be made, adding that further developments will be communicated to shareholders in due course.
Accordingly, Guinness Nigeria’s shareholders are advised to exercise caution in dealing in Guinness Nigeria shares until further information is provided.

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