Offers N130b

An International  Milling firm, Olam International Limited has offered to buy Dangote Flour Mills Plc at a prime price of N130bn.

According to the company, the acquisition of Dangote Flour Mills Plc supports the strategy of the Grain and Animal Feed business, one of its prioritised platforms for growth, to expand its wheat milling capacity in high-growth markets, such as Nigeria.

“We are confident about the growth prospects in this country and this acquisition, doubling our installed capacity here, is evidence of our long-term commitment to the Nigerian economy,” the Managing Director and Chief Executive Officer, Olam Grains and Animal Feed, K.C.Suresh, said.

Dangote Flour Mills, in a notice to the Nigerian Stock Exchange on Tuesday, informed its shareholders and the investing public that its board had received a binding offer from Olam International Limited to acquire all of the outstanding and issued shares of Dangote Flour Mills “that are not currently held by Olam or its subsidiary, Crown Flour Mills Limited.”

It said, “The total consideration offered by Olam and being considered by the Board of DFM for the entire 5,000,000,000 issued shares of the company is N130bn. The consideration represents the enterprise value on a debt-free, cash-free basis, payable in cash at the closing of the proposed transaction.

“This consideration will be adjusted for the net working capital and net debt as of March 31, 2019 or any other later date that may be agreed by Olam and the Board of DFM to arrive at the final price payable to equity shareholders. The final price to be paid to the shareholders of the company would be adjusted downwards to exclude shares held by Olam through its subsidiary.”

According to Dangote Flour Mills, the offer is subject to, among other things, shareholders’ approval, regulatory approvals, the sanction of the Federal High Court as well as the absence of a material adverse change in DFM.

“If the conditions of the transaction are satisfied and the same is sanctioned by the court, the company would be delisted from the Nigerian Stock Exchange,” it added.

DFM’s shares jumped 9.8 per cent to N11.75 after the offer was announced.

Olam was founded in Nigeria as an exporter of cashew nuts 30 years ago and has since grown into a global behemoth with operations in more than 60 countries and a market value of $4.5bn.

The deal will enable it to build on a country workforce of almost 3,000 while tapping local demand for bakery, snacks and pasta products.