New details emerge, as CAP nears acquisition of Portland Paints

As Chemical and Allied Products (CAP) Plc nears acquisition of Portland Paints and Products Nigeria Plc, both companies have undergone their court-ordered meeting, as they reach a resolution which pushes the acquisition plan towards the end.

Prior to the court-ordered meeting, CAP had offered Portland Paints’ shareholders cash consideration of N2.90 kobo for every share held in Portland Paints or a share consideration of 1 new ordinary share of CAP at N0.50kobo, in exchange for every 8 ordinary share held in Portland Paints.

Portland Paints shareholders have agreed to the offer, which will pend till regulatory approval from Securities and Exchange Commission (SEC) and the court, a statement released to the investing public on Thursday, disclosed.

In October last year, both companies had explained how they arrived at the pay-off, “The proposed consideration represents a 45% premium to the last traded share price of Portland Paints on October 16, 2020, being the last business day prior to the date on which CAP sent its merger proposal to the Board of Portland Paints and a 41% premium on the trading price as at close of trading on October 23, 2020.”

Ripples Nigeria gathered that upon the acquisition becoming effective, 99,176,942 of Portland Paints shares will be alloted to CAP’s Scheme Shareholders who elect to receive the share consideration.

Meanwhile, once CAP and Portland Paints conclude the consolidation, Portland Paints brand name will be dropped, as CAP will remain. Part of the deal include CAP absorbing Portland Paints liabilities including debts.

Read also: Portland Paints announces merger plan with CAP Plc

All the products under Portland Paints will also be owned by CAP, expanding the companies dominance in the paint market which consist of Berger Paints, Dulux, Meyer Paints, President Paints, Eagle Paints and many other small brands.

While speaking on the essence of the acquisition, the firm said, “CAP and Portland Paints play in distinct segments, and the enlarged CAP will have a broader portfolio covering the top-end/premium decorative segment, the mid-market decorative segments as well as the industrial segment (in particular marine and protective coatings).

“We believe that the Proposed Merger will provide our customers access to a broader product portfolio and a wider range of value options to meet their needs.” the company stated in October 2020.

Note that both regulator and the court could modify the details of the deal, but CAP and Portland Paints have given their directors authority to accept the modification as seen fit by the SEC and the court.

By Fakoyejo Olalekan…

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