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Foreign investors withdraw from Seplat after President Buhari rescinds approval on ExxonMobil deal

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Seplat Petroleum to acquire Eland Oil and Gas in £382m deal

Seplat share slumped on Thursday at the London Stock Exchange (LSE) after President Muhammadu Buhari rescinded the approval given to the firm to complete the acquisition of Mobil Producing Nigeria Unlimited (MPNU).

On Monday, President Buhari had granted the request to acquire MPNU from ExxonMobil, but hours later, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), said consent can only come from the commission, as empowered by the Petroleum Industry Act.

NUPRC ordered that both Seplat and ExxonMobil maintain status quo, thereby, hindering the completion of the deal, and preventing both parties from transferring assets.

With confusion surrounding the deal, President Buhari’s spokesperson, Garba Shehu, on Thursday, stated that NUPRC had received backing from the President, indicating Buhari had withdrawn his approval.

Read also: Foreign investors exit Seplat, amid NNPC lawsuit blocking ExxonMobil acquisition deal

Following the revelation, foreign investors dumped Seplat shares on the London exchange floor, reflecting low confidence in the company’s growth, as the acquisition of MPNU was expected to grow the firm’s production and revenue generation.

Increased revenue could positively impact shareholders’ investment, as it enables Seplat to increase its dividends.

However, with the deal being blocked by Nigerian government eight months after Seplat announced it had reached an agreement with ExxonMobil, earnings growth would be negatively impacted.

Ripples Nigeria gathered that some foreign investors on the London Stock Exchange sold off their stake to withdraw their investment in Seplat, with the sell off resulting to the stock crashing -6.26% after trading hours, to close at GBX116 from Wednesday’s GBX123.75.

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