Presco Plc (NGX: PRESCO) is set to acquire 100% equity stake in Ghana Oil Palm Development Company Limited (GOPDC).
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The deal which is subject to the approval of PRESCO Shareholders is valued at US$124.92 million, translating to US$1.77 for each ordinary share of GOPDC.
PRESCO has made an offer to Societe d’investissement pour l’Agriculture Tropicale (Siat SA) to acquire 100% of the 70,580,000 ordianry shares of GOPDC. The acquisition consideration will be settled in phases, with an initial consideration payment of US$64.96 million, with the balance to be settled at a future time.
Upon conclusion of the transaction, GOPDC will become a subsidiary of Presco Plc.
Presco Plc was incorporated in Nigeria on 24th September, 1991 as Presco Industries Limited, a private limited liability Company, and became a public limited liability Company in February 2002.
The Company owns oil palm plantations, a palm oil mill and palm kernel crushing plant, vegetable oil refining and fractionation plant.
In 2002, the Company became a public limited liability Company and with a successful Initial Public Offer (IPO), its shares were admitted to quotation at the Nigerian Stock Exchange.
SIAT SA is the major shareholder in Presco Plc, holding 60% of the company’s ordinary shares as at the end of 2023.
GOPDC, a wholly owned subsidiary of Societe d’investissement pour l’Agriculture Tropicale (Siat SA), is an integrated agro-industrial company specialised in the cultivation of oil palm, extraction of crude palm oil and palm kernel oil, production of specialty oils and fats and distribution of refined oil products.
In line with the requirements of the Nigerian Exchange (NGX) on related party transactions, SIAT SA, the core shareholder of GOPDC and a significant shareholder in Presco, will not vote on the resolutions to approve the transaction.
With SIAT SA being the majority shareholder in PRESCO, the decision to proceed with the Transaction will be made by the minority shareholders of the company.
In an explanatory statement on the proposed acquisition, PRESCO said that the transaction will position it as a large African conglomerate with an expanded customer based and an increased market share within Africa.
The deal is expected to increase Presco’s plantation size by 19% from c.43,547 hectares to c.51,760 hectares.
It went further to say that based on the available financial statements, Presco generated 100% of its revenue in local currency in 2023, while GOPDC generated c.41% of its revenue from export sales primarily in US Dollars and Euro. The currency diversification will mitigate the impact of adverse exchange rate movements on the Company’s financial performance.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur
