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   Market Date: 20-10-2014   
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Dangote Flour to float shares at N15 per share

Category: Public Offers Private Placements


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Dangote Flour to float shares at N15 per share

Prospective investors wishing to participate in the forthcoming Initial Public Offering of Dangote Flour Mills Plc may have to pay between N14 and N15 per share, findings by our correspondent have revealed.

 

Encouraged by its positive experience in the Benue Cement Company Plc and the Dangote Sugar Refinery Plc, the Dangote Group decided to list more of its subsidiaries on the stock exchange.

 

The Chairman of the Dangote Group, Alhaji Aliko Dangote, had given the hint that Dangote Flour Mills, Obajana Cement and Dangote Cement would be listed in the market.

 

Although the volume of the IPO is yet to be known, competent capital market sources said that plans were being concluded for the floatation of the shares of Dangote Flour Mills.

 

The company was said to have appointed parties to the IPO, while it was further gathered that the directors of the company and financial advisers would soon arrive at a final offer price.

 

Sources said that the directors had suggested N16 but some of the advisers wanted something lower.

 

“Although the final price has not been fixed, from every indication, investors will buy the shares between N14 and N15 per share,” a source said.

 

Findings by our correspondent showed that investors are warming up for the IPO with the anticipation of another boom similar to what they experienced in DSR.

 

Investors who bought the shares of DSR during the IPO last year at N18 per share realised a historic capital appreciation of 211 per cent after the listing of the shares March 17, 2007. Besides, shareholders received a dividend of N1.15 per share in the company’s first year in operations. DSR became the first company that promised a quarterly dividend to shareholders.

 

The company had already paid the first interim dividend for the quarter ended March 31, 2007.

 

“These antecedents are making any company from the stable of Dangote to be attractive to investors. Do not forget what happened when the company took over BCC, its share price soared to record high last year. The same thing has happened to National Salt Company of Nigeria Plc,” Mr. Ayo Oguntayo of Mission Securities Limited said.

 

Dangote acquired a majority stake in NASCON at 69kobo but the shares were re-listed at N5 per share.

 

The re-listing was followed by an unprecedented price appreciation. By the time Dangote sold 400m units of the company at N22 per share, it had realised over N8bn from the investment.

 

Desperate stockbrokers who wanted to acquire some of the shares and made bids above their initial orders, were penalized by the Nigerian Stock Exchange. NASCON share price traded for N25.70 per share on Wednesday.

 

When contacted, the spokesman for Dangote Group, Mr. Joseph Okonmah, requested to be given till Thursday to provide details. - Punch



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