Nipco offers $16m to take over Mobil

Nipco Plc is offering $16 million to increase its shares in Mobil Oil to 70 percent and comply with takeover rules in Nigeria.

Nipco’s investment subsidiary bought 60% of Mobil Oil Nigeria shares from Exxon Mobil Corporation in October, when the latter pulled out of downstream fuel distribution in Nigeria.

Nipco, which was founded in 2001 and presently owns 66.7% shares in Mobil, is offering minority shareholders N417.12 per share for 11.6 million shares, 3.23 percent of the capital it needs.

The offer, which ends on June 29, is the same price it paid Exxon and a 75 percent premium to Wednesday’s market share price of N238.36.

“On March 31, 2017, NIPCO Investments Limited acquired 216,357,157 ordinary shares in Mobil Oil Nigeria PLC (representing a 60.00% equity stake in MON) from ExxonMobil Oil Corporation. NIPCO Investments Limited and Exxon Mobil Oil Corporation executed a Share Sale and Purchase Agreement detailing the terms and conditions of the acquisition,” a publication on the Nigerian Stock Exchange website read.

“The acquisition was concluded following receipt of the required regulatory approvals from the SEC and the NSE. In accordance with Section 131(1)(a) of the ISA, NIPCO Investments Limited is required to make a takeover bid to all the other shareholders of MON. Consequently, on December 13, 2016, the board of NIL granted approval for a takeover bid to be made to all qualifying shareholders, for the acquisition of the offer shares.

“NIL will effect full settlement of the consideration due to qualifying shareholders who have validly deposited offer shares pursuant to the takeover bid not later than 14 days after the closing date.”

Nigeria currently exports 1.6 million barrels of oil per day but imports the bulk of its refined products because its refining capacity is unable to meet daily fuel needs of 40 million litres.

Mobil, which was founded in 1951, is a fuel distributor with petrol stations across the country, it also owns plants where it manufactures lubes, petroleum jelly, and insecticides.