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Seven-Up Bottling Company (NGSE:7UP) Plc has filed an application with the Nigerian Stock Exchange (NSE), seeking to delist its shares from the Exchange and end its 32 years as a publicly quoted company.

 

A regulatory report at the Exchange indicated that 7-Up has already started the delisting reminiscent of the exit of its rival, Nigerian Bottling Company (NBC) from the Exchange.

 

Despite strong protests from minority shareholders, the majority core investor of 7-Up-Affelka SA had last January 11 pushed through approval to acquire the outstanding 26.8 per cent shares held by the minority shareholders.

 

At a court-ordered meeting in Lagos, shareholders approved the scheme of arrangement for the acquisition. With this, Affelka SA will increase its ownership of the Nigerian soft-drink company to 100 per cent by acquiring all the outstanding and issued shares, previously held by the minority shareholders.

Affelka SA had, on the eve of the court-ordered meeting, increased its bid price by 10.9 per cent to N125. It had earlier offered N112.70 per share for the 171.54 million ordinary shares of 50 kobo each held by the minority shareholders.

 

In consideration for the transfer of the shares, a payment of N125 per scheme share will be made to each shareholder. This payment represents a 22.6 per cent premium on the last traded share price of Seven-Up on January 9, 2018 and a 27.6 per cent premium on the share price as at close of August 9, 2017 being the last business day prior to the date the initial proposal was received from Affelka.

 

The NSE subsequently slammed a full suspension on the shares of the soft drink bottling company. Under full suspension, there will be neither trading nor price movement on the company’s shares.

 

According to the Exchange, the suspension was for the purpose of determining the shareholders who will qualify to receive the scheme consideration under the Affelka SA’s buy out deal.

 

Nigerian retail minority shareholders had decried the move by Affelka SA to buy out all minority shareholders and turn the 57 years old company into a wholly owned subsidiary.

 

Minority shareholders said the move by Affelka was in bad taste and called on capital market regulators to block the bid.

 

Founder, Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, said the decision by Affelka, which owns about 73 per cent, was an affront to the Nigerian consumers and shareholders that had helped in building the soft drink company to its enviable position.

 

Nwosu called for adequate regulatory framework that protects Nigerian investors and forestalls such move to deny Nigerians opportunity to be part of the national wealth creation.

 

“I don’t think it is an appropriate thing to do, we have contributed all these years to build this company and now they want to take us out, from sharing in the wealth we created. It is a very serious issue,” Nwosu said.

 

President, Association for the Advancement of Rights of Nigerian Shareholders (AARNS), Dr Faruk Umar, said Nigerian capital market regulators should protect minority shareholders’ interest in the transaction.

 

He added that Nigerian minority shareholders should look beyond immediate and short-term capital gain to implication of such acquisition, which will turn the company into a fully-owned foreign company.

 

Shareholder Activist and Co-Founder, Nigeria Shareholders Solidarity Association, Gbadebo Olatokunbo, said the Securities and Exchange Commission (SEC) should undertake a forensic audit of Seven-Up Bottling Company to unravel the reasons for the decline in the performance of the company in the past three years and the sudden interest of the foreign majority shareholder to acquire all the shares of the company.

 

“Though the rule of the game at the capital market is “free entry and free exit”, but the rules insisted on equity on all dealings, therefore the Nigerian local investors are saying we want the forensic-audit of 7-UP since 2014, because we are yet to be convinced that the recent takeover notification of 7-UP is not fraudulent. Why the renewed interest of the majority shareholders in a sudden sick company? Why were they now interested in the takeover when the company isn’t growing? How are we sure that they weren’t the brains behind the unexpected bad results?,” Olatokunbo said.

 

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