Champion Breweries: Minority Shareholders Protest Heineken Takeover Bid
Some minority shareholders of Champion Breweries Plc have kicked against the bid by The Raysun Nigeria Limited to take over the company 100 per cent, saying the Securities and Exchange Commission (SEC) is not doing enough to protect investors in the nation’s capital market. The shareholders have therefore written to SEC to stop The Rassun Nigeria Limited, which is subsidiary of Heineken Heineken N.V, majority owners of Nigerian Breweries Plc, from buying out the minority shareholders. The shareholders are asking that the company be merged with Nigerian Breweries as Heineken did with previous acquisitions it had in Nigeria.
SEC recently gave its approval to The Raysun Nigeria Limited to proceed with the proposed Mandatory Takeover Offer (MTO) for 1,196,799,164 ordinary shares of Champion Breweries Plc at N2.60 per share. These shares represent the remaining 15.3 per cent stake in the company that the Dutch brewery does not yet own.
However, in a letter to the Commissioner, Compliance, SEC, shareholders under the aegis of Progressive Shareholders Association of Nigeria (PSAN), are asking the MTO be stopped because it did not follow due process and it is in being done in bad fate with the intention to delist from the Nigerian Exchange Limited (NGX).
“The core investor has sought an MTO of the Champion Breweries Plc, which may result in the eventual delisting of its shares, a position we feel is detrimental to the interest of the minority investors.”
It is also our understanding that SEC approved the MTO without a tender paper indicating the approved buy-back price and other relevant details of the transaction. In the same vein, the NGX’s free float regulations require a minimum local ownership which appears not to be obtainable in the current ownership structure. We would like to know what offence the minority shareholders have committed not to be invited to an extraordinary general meeting (EGM) where issues on the proposed MTO may have been adequately explained and due process followed to ensure that the interest of the common investor is protected,” PSAN said.
The association, in the letter signed by its National Chairman, Mr. Boniface Okezie, said it would like to know why SEC gave approve for MTO where minority shareholders’ interests are always at stake.
The shareholders lamented that the regulator is not doing enough to protect minority shareholders, a development, it said is causing low patronage of the capital market.
PSAN disclosed that the Champion Breweries Plc was revived through the efforts of the minority shareholder, including the Akwa Ibom Government, but they about to be denied reaping benefits of their investments through the MTO.
They have therefore resolved that none of their shares, including the 11 per cent owned by Akwa Ibom State, would not be offered for sale to achieve the MTO.
“We rather propose that a merger between the company and any other suitable match would be a more reasonable approach as has been done in the past by the same core investor instead of delisting the company shares. We request that shareholders be allowed to endorse a potential deal formally at an EGM where all stakeholder interests are represented. We have no issue with the core investor if they want to divest their investment, which there are at liberty to but we insist that the core investor desists from practices that are can endanger the fortunes of other minority investors in the company,” they declared.