NIGERIA – Minority shareholders of Seven-Up Bottling Company Plc on Thursday 11th January 2018 voted to sell their shares to the majority shareholder, Affelka S.A. for ₦21.4bn ($66.5 million).
At a Court-Ordered Meeting in Lagos, shareholders approved the scheme of arrangement for the buyout. With the transfer of 26.8% minority shares to Affelka, the firm’s ownership of Seven-Up increases to 100%.
The Scheme of Arrangement requires Affelka to pay minority shareholders of Seven-Up ₦125 Per Share for the remaining 171,542,574 million shares, a 22.6% premium to the last traded share price of the company on 9th January 2018, and a 27.6% premium to the price on 10th August 2017 which was the last business day prior to the date the initial proposal was received from Affelka.
Chairman, Seven-Up Bottling Company Plc, Mr. Faysal El-Khalil said, the acquisition will create considerable benefits and opportunities for all stakeholders of the company while also helping to protect minority shareholders from a continuous erosion of value.
“Furthermore, Seven-Up Bottling Company Plc is again assured of Affelka’s long term commitment to the company and Nigeria,” he said.
The soft drinks maker has seen its fortunes turn into losses over the last few years amid the country’s recession.
In the Scheme of Arrangement to shareholders, the company cited challenges posed by unfavourable macro-economic environment, such as sharp currency devaluation, which resulted in skyrocketing cost of raw materials, distribution and other operating expenses, high net finance cost among others.
The firm further said that this was further exacerbated by an extremely competitive environment from both old rivals and privately owned new entrants flooding the market with cheaper products which made it impossible for Seven-Up to pass on the increased costs to consumers.
Accordingly, the company said it believes that the financial position were unlikely to improve in the foreseeable future and that, in the absence of a comprehensive corporate and financial overhaul, the company’s shareholder book value of equity, which lost 47% in 2017, would be further eroded by the continued losses.
On 30th November, the company announced that it had received an offer from Affelka to acquire the remaining shares of minority shareholders.
Sunil Sawney, Vice Chairman of Seven-Up said at the time that the aim of the acquisition was to restructure the company, adding that delisting the firm from the stock exchange after the buyout would be “logical”.
Affelka believes that the restructuring will enable it shore up the soft drinks company’s balance sheet and capital required for maintaining and expanding the business; enhance product portfolio which will enable the company to better compete with its industry competitors, both existing and new entrants and be better positioned to address consumers changing needs.
Seven-Up is Nigeria’s second largest soft drinks company and holds the franchise for PepsiCo brands such as Pepsi, 7-Up, Mirinda, Mountain Dew and others.
The company was first incorporated in Nigeria in 1959 and was listed on the Nigerian Stock Exchange in 1978.
Beverage Industry News NG