HealthPlus: Alta Semper Acted Outside the Spirit of the Agreement - Opinion


Thursday, October 1, 2020  / 11:37AM / OpEd  / Header Image Credit: Ecographics


The talk in the business community all week has been about the Healthplus disclosures from parties to the deal which has elicited, rightfully concerns from everything to do with Private Equity, Founders and the state of our regulatory space regarding same.


While the matter plays out in the media, there is an ongoing legal battle (and as we have learnt, there are other firms in the PE-Founder "conundrum") which should be of interest from a market learning and growth perspective. That said, it is well within our remit to share thoughts on what our preliminary investigations has revealed about this case.


Regardless of the various assertions in the media, the term "hostile takeover" as is being used to describe the development would, on all probable basis, NOT apply to the case involving Alta Semper and Bukky George from a strictly legal perspective.


Recall that Alta Semper invested $10 million (approx.) to acquire 53.8% equity stake in HealthPlus whilst Bukky George retained 46.2%.


Alta Semper, we understand, agreed to invest an additional $7.1 million in HealthPlus which would have further increased its stake, subject to satisfying certain conditions precedent to that. It would appear that these conditions were not met/satisfied and so Alta Semper did not bring in the additional funds into the business and as such, the ownership remained as is.


The Shareholders Agreement between Alta Semper and Bukky George provided for five (5) directors in relation to HealthPlus Nigeria Limited, as follows:

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  • That Alta Semper will appoint two directors (Zachary Fond and Afsane Jetha)
  • That Bukky George will appoint two directors (Bukky George and Deji Akinyanju)
  • That Alta Semper and Bukky George will jointly appoint an independent director/chairman (Dr. Ayodele Salami)



From the above, it appears obvious and will be pertinent that whilst Alta Semper has the majority shares in the company, it does not control the board of directors of HealthPlus Limited.


The roles and powers/rights of Bukky George as a director/shareholder in HealthPlus are different from her roles and powers/rights over the "day-to-day operations" as CEO/employee of HealthPlus Nigeria.


Nigerian law is very clear on the distinctions as it vests the control of a Nigerian company in the hands of the directors, but allows the directors to delegate some of their powers to a CEO or managing director.


Thus, even though the directors of the company (which include Bukky George) are in control of the company, the directors delegated their powers over "day-to-day" operations to Bukky George under a separate Management Agreement. In effect, cognisance must be given to the fact that separate agreements were executed by Bukky George for her separate relationships as director/shareholder of HealthPlus and as the CEO of the entity.


To confuse or inter-mingle both would appear a mis-read of the investment agreements.


The Current Dispute

The current dispute, properly contextualised, should be seen as actually over the termination of the contract of employment executed between Bukky George and HealthPlus Nigeria. Even though the termination of the contract of employment will reduce the control that Bukky George used to exercise over the "day-to-day operations" of the company prior to the execution of the Management Agreement (when she was the sole owner of the company), it does not reduce the rights of Bukky George as a director/shareholder of the company.

The validity of the termination of the Management Agreement must however be determined based on the process specified in the Management Agreement for removal of the CEO as well as the process specified in the Shareholders Agreement for decisions to be taking by directors/shareholders of the company (including decisions on removal of the CEO of the company).


The Management Agreement employs Bukky George as the CEO of HealthPlus Nigeria. The agreement came into effect in March 2018 and is meant to run for a period of five (5) years ending in 2023. The company can terminate the agreement before 2023 in certain limited circumstances under Clause 15, but the approval of the board of directors (BoD) of the company is required to approve such termination.


One of the limited instances that is provided in the agreement for the company to terminate the Management Agreement is where the CEO "commits an act which in the opinion of majority of board expressed in writing constitute serious professional misconduct".


The correspondence in the public space indicates that this is the clause being relied on by Alta Semper for the termination of the Management Agreement on September 25, 2020.


The problems with this position of Alta Semper are as follows:

  • Since Alta Semper has only two (2) nominee directors (Afsane and Zachary), this means the Chairman is required to have expressed an opinion in writing too for the termination on basis of serious professional misconduct to apply. There is no document showing the Dr. Ayodele Salami has expressed this opinion.


  • Assuming Dr. Ayodele Salami had even expressed a written opinion that Bukky George has committed an act that constitutes serious professional misconduct, Nigerian labour law and the company's policies require that she is first given an opportunity to defend herself and the allegations against her.


  • The quorum for any meeting of director is at least three (3) directors, of which at least the Chairman must be present as well as one director nominee each of Bukky George and Alta Semper. So, since Dr. Ayodele Salami is stated to have resigned on September 24,2020; it is not possible to have convened a board meeting to take a decision on the termination of the Management Agreement on September 25, 2020.


  • Indeed, until a new Chairman is appointed, it will not be possible to hold a board or shareholders meeting in accordance with the agreement.


From the above, the termination of the Management Agreement would not appear to have been done in line with the agreement; and indeed, violates Nigerian labour law. 


DISCLOSURE: This content reflects the views of the author(s) drawing on prior research and experience in their areas of expertise. This is an opinion formed from consultations with credible entities and is published to advance discourse on the subject of coverage. It is not a reflection of our institutional position; and is not a recommendation to act based on the opinions expressed or names/products mentioned therein. Proshare Content and their owners, managers, employees, and assigns (collectively the "Company") are bound to comply with in-house governance rules requiring this necessary disclosure to ensure that readers, subscribers and consumers understand what the content is. All T&C applies.

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About Alta Semper Capital LLP

Alta Semper, a private equity manager investing flexible and strategic capital across select African growth markets, announced in 2018 a partnership with Nigeria's leading retail pharmacy chain HealthPlus. Under the terms of the agreement, Alta Semper invested US$18mn into HealthPlus, which was to enable the company expand its retail footprint and enhance its competitive position. Alta Semper specifically invests into market-leading businesses in defensive sub-sectors within the consumer and healthcare verticals.


The healthcare and retail markets in Nigeria are characterised by growing demand, driven by favourable demographics, increased consumer awareness and evolving consumption patterns. Furthermore, Nigeria is home to one of the least penetrated formal retail markets in the world, despite its large and growing population. The retail pharmacy sector is highly fragmented, with many independent drug stores and several patent medicine outlets. Furthermore, given structural challenges with the industry supply chain, counterfeit pharmaceuticals find their way into over forty percent of the retail market, while most wholesale and retail sales across the country are still made through informal markets. Moreover, much of the healthcare infrastructure is confined to major cities, with people living in urban areas having approximately four times as much access to healthcare as those living in rural areas.


The investment into HealthPlus was to enable the Company capture the pent-up demand for high-quality yet affordable healthcare and professional beauty supplies by developing regional distribution centres in commercial hubs across Nigeria, rapidly expanding the Company's footprint across Nigeria as well as developing a wholesale channel and investing in private label and e-commerce.


Healthplus was Alta Semper's first investment in Nigeria.



About HealthPlus Limited

HealthPlus was founded in 1999 by Mrs. Olubukunola Adewunmi (Bukky) George, FPSN, a Nigeria and UK-trained pharmacist with over 25 years of experience in the pharmaceutical industry, who has organically grown the business into the leading pharmacy chain and retailer of beauty supplies in West Africa.


The Company's quest is to provide the Nigerian consumer with high-quality, life-saving and affordable products and services. Furthermore, the Company aims to make a meaningful and lasting impact by contributing its quota to the achievement of universal healthcare coverage and to increasing life expectancy for all Nigerians.


The Company targets a broad base of consumers through the provision of healthcare products such as prescription and over-the-counter medicines, nutritional supplements, natural remedies, home medical equipment, mobility aids and pharmacy services. The Company employs over 700 people which includes 150 pharmacists, with at least two pharmacists dispensing prescription medicines and providing counselling, free health screenings and value-adding pharmacy services at each pharmacy. It operates branches in strategically-located residential areas, shopping centres and airports across 11 of the 36 states in Nigeria. HealthPlus has one of the highest brand recognition and ratings of any consumer company in Nigeria.


The Company's dedication and professionalism has been recognised with several excellence awards including the ICERTIAS Best Buy Award for #1 Pharmacy in Best Price-Quality Ratio 2017, the Nigerian Customer Service Award for Best in the Pharmaceutical Category 2017 and the Nigeria Healthcare Excellence Award (NHEA) 2016, 2015, 2014.



The Deal Advisors in 2018

  • Alta Semper's legal advisors were Olaniwun Ajayi LP and international law firm Hogan Lovells International LLP.
  • HealthPlus' financial advisor was CardinalStone Partners and legal advisory was provided by Banwo & Ighodalo. 

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Related News to HealthPlus and Alta Semper

1.  HealthPlus, Chicken Republic, others locked in ownership tussles with PE investors...Wakanow, AIC, PathCare on similar path ...Local founders allege forceful takeover by PEs, VC  - BusinessDay, Sept 29, 2020

2.     Alta Semper Capital Responds to HealthPlus Pioneer CEO Accusations, Issues a Q and A  - Proshare, Sept 28, 2020

3.     HealthPlus: Attempted Hostile Takeover By Foreign Private Equity Firm - Proshare, Sept 25, 2020

4.     Health Plus Announces Leadership Changes, Appoints Chidi Okoro as CTO - Proshare, Sept 26, 2020

5.     2 years after receiving $18m from Alta Semper Capital, HealthPlus is witnessing a power struggle Tech Point, Sept 28, 2020

6.     Alta Semper Capital Commits US$18mn to HealthPlus, West Africa's Leading Retail Pharmaceutical Chain - The African Private Equity and Venture Capital Association, Mar 27, 2018

7.     Project Description - Alta Semper Ilera Fund I Limited (IFC-42586) - Early Warning System, Sept 04, 2019




 Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.


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