Some minority shareholders have expressed dissatisfaction with the scheme of arrangement proposed by Titan Trust Bank Limited and Ocean and Oil Development Partners Limited (OODP) to acquire all the shares of minority shareholders in Union Bank Plc and Oando Plc, respectively.
The shareholders have stated that the considerations for minority shareholders are unacceptable and will be challenged at the companies’ Extra Ordinary General Meetings (EGMs) to ensure fair value in respect of the exit price.
Union Bank Plc recently disclosed that its core shareholder, Titan Trust Bank Limited, has made an offer to acquire the shares of all minority shareholders for a consideration of N7.00 per share.
Similarly, Oando Plc disclosed that it has received an offer from its core shareholder, Ocean and Oil Development Partners Limited (OODP), to acquire the shares of all minority shareholders in the company, leading to it’s delisting from NGX and JSE and re-registeration as a private company.
Each Scheme Shareholder is entitled to receive N7.07 in cash or its equivalent in South African Rand (ZAR) for every ordinary share held by qualified Scheme Shareholders at the Effective Date of the Scheme.
The proposed exit prices for minority shareholders by Union Bank Plc and Oando Plc are considered “unacceptable and morally wrong” by the National Coordinator of the Independent Shareholders Association of Nigeria (ISAN), Mr Moses Igbrude. He also called on the Nigerian government to intervene and protect minority shareholders from core investors who are fellow Nigerians.
Mr Patrick Ajudua, the President of the New Dimension Shareholders Association, called on the management of the companies to ensure fair treatment of the minority shareholders in their exit plans. He also suggested that the shareholder’s ultimate protection is important in terms of giving shareholders value for the share purchase.
Both Mr Ajudua and Mr Igbrude urged that the EGMs should not be conducted virtually as this could put the bank at an advantage. This may not fairly compensate minority shareholders who have suffered from non-consistent dividend and bonus issues over the years.
The proposed deals to acquire all shares of minority shareholders in Union Bank Plc and Oando Plc are set to proceed, despite objections from some shareholders. The promoters of the deal believe that it is in the best interest of the companies and their majority shareholders, as well as that of the minority shareholders.