UAC of Nigeria Plc subsidiaries Portland Paints Products Nigeria Plc (NSE: PORTLAND) and CAP plc (NSE: CAP) has agreed to merge their respective businesses, with CAP emerging as the resultant entity.
Both companies, listed on the Nigerian Stock Exchange issued corporate actions to this effect in post-trading hours on the NSE.
The respective Boards of CAP and Portland Paints strongly believe that the Proposed Merger, which provides a unique opportunity to change the Nigerian paints and coatings landscape, will be attractive and value accretive to shareholders of both companies.
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“The decision to pursue the Proposed Merger is driven by the strategic objectives of the Boards of CAP and Portland Paints to drive growth and expansion within the Nigerian and African markets.
“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” – David Wright, Managing Director of CAP.
The combination of CAP and Portland Paints will create a formidable paints and coatings company that will be strategically positioned across segments as a result of its combined brand portfolio (Dulux, Sandtex, Caplux and Hempel); its diversified product ranges spanning decorative and industrial with widespread distribution channels and retail footprint in Nigeria.
Subject to receipt of the relevant regulatory and corporate approvals, the Proposed Merger will be executed by way of a Scheme of Merger (the “Scheme”) in accordance with Section 711 of the Companies and Allied Matters Act, 2020 and other applicable laws, rules and regulations.
The Scheme will involve the transfer of all Portland Paints’ assets, liabilities and business undertakings including real property and intellectual property rights to CAP.
In consideration for the transfer, CAP is offering shareholders of Portland Paints a choice to;
N2.90 for every Portland Paints share held OR
- 1 new ordinary share of CAP, credited as fully-paid up for 8 Portland Paints shares held.
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.
Completion of the Proposed Merger is subject to approvals from the Federal Competition and Consumer Protection Commission, the Securities and Exchange Commission, The Nigerian Stock Exchange as well as shareholders of CAP and Portland Paints, respectively. The Proposed Merger is also subject to the sanction of the Federal High Court.
About CAP Plc
Chemical and Allied Products Plc (CAP Plc), a subsidiary of UAC of Nigeria Plc, is a technological licensee of Akzo Nobel Coatings International B.V. (“Akzo Nobel”).
CAP Plc evolved from the world-renowned British multinational Imperial Chemical Industries Plc (ICI), which formalized its Nigerian operations in 1957 under ICI Exports Limited.
In 1965, ICI Exports Limited changed its name to ICI Nigeria Limited and in 1968 it was subsumed by ICI Paints Limited. ICI was acquired in 2008 by Akzo Nobel. ICI changed its name to Chemical and Allied Products Limited (CAPL) in the spirit of indigenization and in1991, CAP Plc became a public company.
In 1992, ICI Nigeria Limited disposed-off its 40% shareholding in CAP PLC when it sold 35.7% of its equity to UAC of Nigeria PLC and the rest to the Nigerian public. Currently, UAC of Nigeria Plc holds 51.49% of the Company’s shares.
The Company is involved in the manufacturing and sale of paint. The address of the registered office is 2 Adeniyi Jones Avenue, Ikeja, Lagos.
CAP has 700,000,000 outstanding ordinary shares and a market capitalization of N12.950.
About Portland Paints and Products Nigeria Plc
Portland Paints and Products Nigeria Plc (“Portland Paints” or “the Company”), a subsidiary of UAC of Nigeria Plc, was incorporated as a private limited liability company on September 3, 1985.
The Company by a special resolution dated April 24, 2008 became a public limited liability company and thus changed its name to Portland Paints & Products Nigeria Plc.
Portland Paints is a leading paints manufacturer in Nigeria and is among the most diversified paints manufacturing companies with decades of experience in producing Decorative, Industrial and Marine/Protective coatings for the building/construction and oil and gas industries in Nigeria.
Portland Paints has 793,415,535 outstanding shares and a market capitalization of N1.626 billion.
By; Nnamdi M.