Dangote closes in on $2.5bn private share sale ahead IPO

Aliko Dangote, president of Dangote Group, has nearly completed a $2.5 billion private placement for his oil refining business, people familiar with the matter told Bloomberg, clearing the way for what is shaping up to be Africa’s biggest initial public offering.

Africa’s richest person sold a stake of up to 6 per cent in Dangote Petroleum Refinery & Petrochemicals FZE, the people said, asking not to be identified because the details aren’t public.

The pricing implies a valuation of roughly $40 billion for the company, which owns the 650,000-barrel-a-day refinery on the outskirts of Lagos, the largest single-train facility of its kind in the world.

The placement was oversubscribed within weeks of opening. Femi Otedola, the FirstHoldCo chairman, committed $100 million and told reporters he liquidated his entire holding in Geregu Power Plc to fund it.

Nigeria’s pension regulator also cleared retirement funds to participate for the first time, opening a pool of savings worth more than $17 billion to a listing that had previously drawn mostly wealthy individuals and institutions.

The size of the raise underscores how sharply investor appetite for the asset has grown.

Dangote had floated a target near $2 billion when he first discussed the placement publicly in May.

The final tally, if confirmed, would be well above that mark and would push the implied valuation of the refinery close to double what analysts were pricing it at as recently as late last year.

The listing, expected to land on the Nigerian Exchange as soon as September, would offer investors a rare vehicle for exposure to the continent’s downstream oil sector.

Dangote has also signalled interest in a cross-border component to the offering, aimed at drawing capital from investors elsewhere on the continent rather than relying solely on the Lagos exchange.

Terms of the placement, including the identities of participating investors beyond Otedola, couldn’t immediately be determined.