In the early hours of Tuesday, manufacturers of food products UAC announced its agreement to Imperial logistics move to increase stakes in MDS logistics limited, owning the importance of the transaction is consistent with its strategy to “empowering best-in-class management teams,” UAC report stated.
According to the report, imperial logistics propose to increase its holdings in MDS logistics limited to 57 percent from 49 percent by acquiring additional 8 percent shareholding from UAC which is subject to relevant regulatory approvals.
Imperial logistic which is an African and Eurozone logistics provider listed on the Johannesburg stock exchange is said to transfer selected profitable contracts to MDS and pay $2.4 million in cash based on a $40 million equity value for MDS.
MDS is a Nigeria integrated logistics service provider.
Johan Truter, Chief executive of African regions for Imperial logistics explained the company’s strategy is driven by the need to expand businesses across Africa through working with strong partners. According to him, “we consider Nigeria to be a strategically important market, hence our continued partnership with UAC to grow MDS and expand its service offerings to clients.”
However investors on the Nigerian stock exchange (NSE) market remained unmoved by UAC’s moved but instead behaviour still influenced by prevailing negative market sentiments and weak fundamentals.
UAC’s stock price on Tuesday closed at N5, 2.91 percent from previous level on Monday. This worsened the consumer goods firm’s year to date performance to -48.71 percent with investors losing N13.68 billion in stock holding value during the period.
Although UAC released an impressive performance in the first half of the year 2019, growing net income significantly by 101 percent to N2.59 billion against N1.29 billion y/y, however, falling upper middle-class earnings in real terms and downward pressure on private sector wages threatens industry players’ performances.
DAVID IBIDAPO
