FMDQ Group may pay N20bn to acquire 21.6% stake in CSCS

In a couple of days, FMDQ Group could pay up to N20billion to acquire 21.6 percent equity stake in Central Securities Clearing System (CSCS) Plc, sources familiar with this development told BusinessDay.

It was learnt that FMDQ Group has agreed to buy out shares owned by Leadway Insurance and that of Artemis Limited, a vehicle owned by Verod Capital.

Leadway and Artemis own 16.6 percent and 5 percent stakes respectively in CSCS. Their stakes combined are 1.08billion units.

Transactions of this nature usually go with a premium of between 20 percent to 30 percent, according to the informed market source.

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As at December 31, 2020 CSCS has 6 shareholders with over 5 percent ownership. They are Nigerian Exchange Group (29.19percent). Access Bank (7.5percent), UBA (5.37percent, Artemis Limited (16.6percent), Ess-ay Investments Limited (10percent), and Leadway Insurance (5percent).

CSCS Plc has 5billion shares outstanding, each of the shares trade at N17 on the NASD Over The Counter (OTC) market. With this deal, the share price of CSCS could rally further, having gained about 183percent last year.

FMDQ is one of Africa’s leading financial market infrastructure groups with ownership in a host of companies offering services that are vertically integrated into the financial market system.

CSCS is a leading clearinghouse for capital market operations in Africa’s largest economy.

The transaction is still subject to the approval of the Security and Exchange Commission (SEC) and the Federal Competition and Consumer Protection Commission (FCCPC).