Dangote Flour reduces preferential allotment to 20%

Dangote Flour reduces preferential allotment to 20%

September 19, 2007/ThisDay

 

 

The management of Dangote Group has decided to reduce the preferential allotment from 60% to no more than 20% of the ongoing Dangote Flour public offer in order to accommodate more interested retail investors, THISDAY has learnt.

 

This makes up to one billion shares, out of the 1.250 billion on offer, now available to retail investors.

 

 

Preferential allotment, which reserves a certain percentage to an individual or group of shareholders at an agreed price, automatically reduces the number of shares available to retail investors. 

 

The decision to reduce the allotment, THISDAY was told, was because of impressive reaction the Dangote Flour offer, which opened to the investing public on September 6, with 1.250 billion ordinary shares of 50k each at N15 per share, is generating from the investing public.

 

 

THISDAY checks revealed that banks and issuing houses have practically run out of forms as the interest of the investing public to get a slice of the offer continues.

 

 

The Dangote Group is said to be “in a fix†as demand has outstripped its original projections, and is making frantic arrangements to roll out more forms so that a vast majority of the public can still invest in the Initial Public Offering which according to its offer schedule will end September 27.

 

 

A visit to most of the issuing houses and banks revealed long queues as members of the public take their turns to pick forms.

 

 

A student of

University of Lagos, Sunny Agha told THISDAY that he had saved part of his pocket money to be able to invest in the Dangote Flour Mill IPO. He regretted missing out on the Dangote Sugar Refinery initial public offering last year.

 

According to him, “my friends who bought the Sugar IPO made a lot of money and when they were reaping dividends I was just looking; so I promised myself that I won’t miss out on this. I have saved to wait for this opportunityâ€ÂÂÂÂÂ.****

 

 

Mrs. Agnes Iyabode, who had queued for a chance to pick up the form in one of the new generation banks, also stated that she was motivated to invest in the Flour offer because of the huge returns she made from the Dangote Sugar Refinery Initial Public offering last year. She said she was optimistic of similar returns.

 

 

The flour milling business operated as a division of Dangote Industries Limited until January last year when it was spun off as Dangote Flour mills Plc.

 

 

The purpose of this IPO, according to Aliko Dangote, president of Dangote Industries LTD “like the two previous ones within the Dangote Group, is essentially to give the investing public the opportunity to become part owners of Dangote Flour and in the process enable the company meet the listing requirements of the Nigerian Stock Exchange.

 

 

With the interest so far shown by members of the public in this offer, most of the issuing houses are projecting a huge over subscription.

 

 

 

 

The company originally set out to raise N18 billion and, according to feelers from the company and the issuing houses, there are no plans to increase the size of the offer. -ThisDay

 

****NB: Investors are advised to enter the capital market and participate only when the risks and rewards have been evaluated.


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