In a desperate move to get shareholders consent at today’s court-ordered meeting, Affelka S.A. the majority investor in Nigeria’s listed Seven-Up Bottling Company Plc has increased the consideration per share to N125.
Privately-held Affelka offered to acquire a 26.8percent stake or 171.5million shares in Seven-Up Bottling Company Plc it did not already own. It had earlier priced the offer at N112.70 per share.
The Nigerian Stock Exchange was notified of the upward revision on Wednesday and implies readiness to pay N21.4billion which is additional N2.07billion from earlier proposed N19.33 billion.
Seven-Up share price had reached a 52-week high of N122.55kobo before reaching a 52-week low of N74. As at Wednesday the share price stood at N101.97.
The proposed Scheme Consideration represents a 22.6percent premium to the last traded share price of the Company on January 9, 2018; and a 27.6percent premium to the price on August 10, 2017 which was the last business day prior to the date the initial proposal was received from Affelka.
Affelka, the investment firm of the Lebanese El-Khalil family, would not vote at today’s meeting which has been ordered by the court to decide on the buyout.
The move by Affelka S.A to acquire all outstanding and issued shares of Seven Up Bottling Company (SBC) plc highlights the unequal relationship between majority owners and minority shareholders in Nigeria. Affelka currently owns 73.2 percent or 469,047,789 ordinary shares of the Company.
Seven-Up Plc current shares outstanding are 640,590,363 units with market capitalisation at N65.320billion. Seven-Up Bottling Company would be delisted from the Stock Exchange after the takeover, which is subject to shareholder and regulatory approvals.
At the current market cap, when approved, the share buy-out which in future results to delisting of Seven Up Bottling Company Plc from the Nigerian Stock Exchange (NSE) will lead to huge value erosion of about N65billion from the current market cap of the Nigerian Stock Exchange (NSE).
Seven-Up Bottling Company Plc is one of the largest manufacturing companies in Nigeria. The company produces and distributes some of consumers’ favourite brands of soft drinks.
In the full-year to September 30 2017, Seven Up Bottling Company Plc reported revenue of N108.277billion, from N85.634billion in 2016, up by 26.44percent. Gross Profit was down to N12.927billion, from N25.012billion in 2016, a decline of 48.32percent.
The company reported loss before tax (LBT) of N11.228billion from a profit before tax (PBT) of N3.757billion in 2016, down by 398.84percent; while loss after tax (LAT) for the period was N10.776billion from a profit after tax (PAT) of N3.347billion in 2016, a decline of 421.94percent.
Some of Seven-Up Plc brands are popular and widely consumed across the length and breadth of Nigeria. The company has nine bottling plants with state of the art manufacturing facilities located strategically across the country. Seven-Up Bottling Company market strategy is buoyed by an extensive distribution network of over 200 distribution centers located across Nigeria.
It will be recalled that a Lebanese Mohammed El-khalil who came to Nigeria for the very first time in 1926 founded the company. Mohammed is the father of the company’s current chairman Faysal El-Khalil. The company metamorphosed from a very successful transport business [El-Khalil Transport] in a bid to diversify the then largest transport company in the entire West of Africa.
On October 1st 1960, the exact day Nigeria won her independence; Nigerians also experienced the birth of a soft drink giant as the first bottle of 7Up rolled out from its factory located in Ijora.
Since then, the company continued to grow in the leap and the bound. In the late 80s, Seven-Up established two more plants in Ibadan and Ikeja. In the early 1990s when Pepsi International took over 7Up international, the company again got great opportunities to introduce the Pepsi brand to Nigeria. As at today, Seven Up Bottling Company Plc has its Headquarters in Beirut and operational base in three African countries –Nigeria, Tanzania and Ghana.
Iheanyi Nwachukwu
