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Heineken’s Distilled Trading Int’l engages in Nigerian Breweries’ insider trading

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Heineken's Distilled Trading Int’l engages in Nigerian Breweries' insider trading

An insider dealing occurred in Nigerian Breweries in the second week of last month after Distilled Trading International B.V. acquired more shares in the company.

Insider trading is the buying and selling of a company’s stock by an individual employed by the firm, major owner, or relatives and friends of persons attached to the organisation.

It often has an impact on share price movement, so it’s used as an indicator or trading tip by other investors to know when to buy or sell – it could also be a fraudulent activity by persons with inside knowledge trying to make profit off shareholders or investors who don’t have inside information.

Distilled Trading acquired 16.54 million shares in the local alcoholic manufacturer on June 8, this year, at a cost of N47.75 kobo per share – This means the investor pumped N780 million into Nigerian Breweries.

There’s a problem

Insiders are obligated to inform the Securities and Exchange Commission (SEC) about their acquisition or sales not later than 48 hours as an hidden insider trade is considered illegal.

But Ripples Nigeria note that the investing public was just informed about Distilled Trading deal on July 12, a month and days after it occurred.

Read also: Nigerian Breweries appoints Heineken Egypt chief, Essaadi as new MD

Since the company acquired the shares, Nigerian Breweries stock value has appreciated by 25.6 percent, gaining N12.25 kobo within the one month period.

Distilled Trading investment of N789.83 million has climbed to N992.46 million within one month due to the shock appreciation, according to Ripples Nigeria analysis, as the brewer’s stock now sell at N60 per share.

What you need to know

Prior to the recent acquisition, Distilled Trading held 1,237,500,160 shares at the Nigerian Breweries, and didn’t sell or buy any share in 2020 according to Nigerian Breweries FY financials, but it has now added 16.54 million shares to take its portion to 1,254,041,196 ordinary shares.

This will further Cement the company’s grip on Nigerian Breweries as Distilled Trading is the second largest shareholder at the brewer, accounting for 15.47 percent as at December 31, 2021.

In terms of substantial holdings, Distilled Trading is behind Heineken Brouwerijen B.V. which holds 37.94 percent, and ahead of Stanbic Nominees Nigeria Limited which accounts for 11.37 percent.

Although, both Heineken Brouwerijen B.V. and Distilled Trading are part of the Heineken N.V. Group as stated by the Nigerian Breweries financial statements for 2020 full year.

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