Olam makes N120 billion revised offer for Dangote Flour Mills

Dangote Flour Mills on Monday announced it has received a revised binding offer from Crown Flour Mills Limited and Olam international limited, an addendum to an initial offer by Olam to acquire Dangote Flour Mills.

Olam international limited had in April offered N130 billion for the entire 5,000,000,000 issued shares of Dangote Flour Mills but the consideration which represents the enterprise value of Dangote Flour Mills on a debt-free, cash-free basis, payable in cash at the closing of the proposed transaction has been adjusted to N120 billion.

This follows the earlier announcement of April 23, 2019, which stated that the N130 billion consideration would be adjusted for among other things, net working capital and net debt as at 31 March 2019 or any other date agreed upon by board of Olam and Dangote Flour mills.

The other consideration was excluding shares held by Olam through its subsidiary, Crown Flour, in order to arrive at the final price payable to shareholders of Dangote Flour exclusively.

The acquisition would be carried out through Crown Flour, already a stakeholder in Dangote Flour, with the financial backing of its parent company Olams international.

By the addendum, Crown Flour Mills has now submitted a revised offer with a final recommendation of N120billion amounting to N24 per share following the final adjustment.

Following the announcements analyst at Lagos-based financial services firm, Investment One, advised that whilst considering transaction costs, investors buy the stock at a price below the consideration of N24 per share.