PZ Cussons looks to delist Nigeria unit with offer to minority shareholders

 Soap maker PZ Cussons has said it has offered to buy out minority shareholders of PZ Cussons Nigeria and aims to de-list the business from the Nigerian stock exchange amid “foreign exchange challenges” in the country. “The group believes the offer to be attractive for the minority shareholders of PZCN, particularly given the recent macroeconomic developments and foreign exchange challenges,” the company said in a statement. PZ in a statement said “PZ Cussons (“PZ Cussons” or “the Group”) today confirms that it has made an offer to acquire the minority-held shares of PZ Cussons Nigeria Plc (“PZCN”). Following this acquisition the Group intends to de-list the business from the Nigerian stock exchange. The Group believes the transaction will significantly simplify and strengthen its business in Nigeria, putting in place a sustainable structure and platform to maximise long-term growth and value.

“The Group has made the offer to the Board of PZCN to acquire the 26.73% of issued share capital held by minority shareholders at a value of ₦21 per share, subject to prevailing market conditions, equivalent to a total cash consideration payable of £22.8 million1 Funding for the transaction is expected to come from existing Naira cash balances. The Group believes the offer to be attractive for the minority shareholders of PZCN, particularly given the recent macroeconomic developments and foreign exchange challenges. It is also confident that the offer is in the interests of Group investors, as part of the focus to deliver against its strategy and create sustainable shareholder value.”

Inflation in Africa’s largest economy, which has been in double digits since 2016, rose to its highest level in nearly two decades in July at 24.08% against 22.79% in June after the country scrapped a popular but costly subsidy on petrol and devalued the currency. The Manchester-based company said in June that the devaluation of Nigeria’s Naira currency would adversely impact its profit next year. PZ Cussons’ offer to the PZCN board is to acquire minority shareholders’ 26.73% stake for 22.8 million pounds or $28.7 million. The group said the funding for the transaction is expected to come from existing Naira cash balances. Last month, GlaxoSmithKline Nigeria said it plans to stop doing business after evaluating the options for moving to a third-party distribution model for its drugs and consumer healthcare goods.