The majority owner of Nigerian fuels and lubricant supplier Ardova plc has proposed to buy out other shareholders and to take the company off the country’s stock exchange.
At least some other stakeholders, however, are complaining that the bid from billionaire Abdulwasiu Sowami’s Ignite Investments and Commodities Ltd. would fleece investors and are asking that Ignite be blocked or forced to pay much more.
Sowami is an oil tycoon who heads Ignite and gained control of Ardova when Ignite bought 74% of the former Forte Oil from its former owner, Femi Otedola, in 2018. The company was renamed Ardova in December of 2019. Lagos-based Ardova supplies lubricants along with motor fuels, propane and other petroleum products.
In a Feb. 6 filing on Nigerian Exchange Ltd., Ardova advised that Ignite approached Ardova’s board of directors at the start of December with an offer to buy outstanding shares of the company’s stock for ₦17.38 per share. The filing also said that Ignite intends to delist Ardova from the stock exchange.
Sowami is chairman of Ardova’s board of directors. While Ardova’s statement hailed Ignite’s offer as 22% premium above the weighted average of the company’s share price over the 30 days leading up to the offer, minority stakeholders complained after the proposal became public that it would represent a big loss for them compared to the stock’s previous value.
A Feb. 13 article in The Guardian, a Lagos-based news website, quoted minority shareholders noting that Ignite paid ₦66 per share when it bought its stake from Otedola. One shareholder argued that Ignite should be forced to match that price now, while another called for Nigeria’s Securities and Exchange Commission to block the plan.
Another shareholder noted that Ardova has lost money recently, while Nigerian competitors posted big profits. The shareholder suggested that Ardova may have intentionally tanked in order to lower the value of the company’s stock and therefore the cost of Ignite’s buyout.
By law Ignite’s proposal must be approved by a shareholder meeting that will be convened on court order.