PZ Cussons takeover: Minority shareholders turn down offer

Minority shareholders of PZ Cussons Nigeria Plc are expressing their dissatisfaction with the offer presented by PZ Cussons (Holdings) Limited, the main shareholder. They are rejecting the proposed purchase price of N21 per share, considering it inadequate.

These minority shareholders are determined to take legal action to ensure they receive a fair valuation for their shares.

According to reports from ThePressNG, PZ Cussons Nigeria Plc (PZCN) recently announced that PZ Cussons (Holdings) Limited intends to acquire all the outstanding shares of the company at the rate of N21 per share. Currently, PZCN has 3,970,477,045 shares listed on the Nigerian Exchange Limited (NGX).

It’s important to note that this proposed transaction is subject to approval by PZCN’s board, the company’s shareholders, and the relevant regulatory authorities, as stated in a press release by the Acting Company Secretary, Olubukola Olonade-Agaga, on the NGX platform.

Reacting to this news, Mr. Patrick Ajudua, President of the New Dimension Shareholders Association, expressed strong opposition to PZ Cusson UK’s intention to buy out minority shareholders in Nigeria for such a low offer of N21 per share. Shareholders are resolute in their stance against this proposal and are prepared to contest it in court to secure a more equitable value for their shares.

What he said

• “It’s unfair, unjust, and means to shortchange minority shareholders. This is a company that has over the last 3 years been involved in asset stripping, they sold part of the factory land at Ikorodu to Friesland Campina for consideration of N2.12 billion and from there paid a dividend. 
• The following year the company disposed of non-core assets with a consideration of N9.84 billion and from there also paid dividends. 
• Therefore, the company has been involved in serial disposal of its assets, using part to pay shareholders as dividend rather than pay from operational profit, thereby planning their exit in phases,” he said.

Ajudua also noted that the deplorable state of corporate governance which resulted in the exit of three board members including the chairman and company secretary raises a great concern for shareholders.

• “We call on the regulator to conduct an independent & forensic investigation into the affairs of PZ, its audited annual report & tax remittances to the appropriate govt agency.
• As shareholders of PZ Cuson, we reject the proposed buyout of minority shareholders for N21.
• Any amount below N100 per share is completely unacceptable to the Nigeria shareholders and will be resisted appropriately,” he said.

The National Coordinator, of the Independent Shareholders Association of Nigeria (ISAN), Mr. Moses Igbrude also in an exclusive chat said the situation where big companies and multinational companies are delisting from the market is a fundamental flaw in the market and raises concerns and questions need to be asked.

• “We need to know what is happening to the market that is making more firms opt to delist the NGX and discouraging others not to list.
• We are calling on SEC, NGX, and other regulators to organize a stakeholder meeting to find answers and solutions to the rising spate of delisting, or else more firms will quit, and our stock market will become a ghost of itself.
• They should proffer solutions on what to do to retain and encourage both multinationals and local firms to quote in the market. They should look at whether it is the cost of listing or regulatory compliance that is driving them away.
• If it is regulatory compliance that is making them delist, then it means that limited firms are doing things that are not right because compliance makes companies transparent and accountable.
• The government needs to monitor both the quoted and limited companies for appropriate disclosures,” he said.

Igbrude noted that there should be clear and spelt-out incentives for listed companies, adding that one of the major issues in the country is that limited companies have more leverage than listed firms either in terms of taxation or other requirements.

He stated that the business environment is hostile and because the government pays less attention to limited companies in terms of proper monitoring, listed firms are attracted to quit the NGX and go limited.

Igbrude said an offer price of N21 per share for minority shareholders is not encouraging and not acceptable.

• “Over the years they have used our money to grow the business and they are now offering us peanuts; it is not acceptable.
• One of the options we are considering is going to court to challenge this proposal, but we need to first watch the unfolding developments,” he said.

Igbrude called on the government to promulgate a law to ensure that core investors in any company are not allowed to have more than 51% equity.

• “With more than 51% equity holding, they can run a company aground and seek to exit with peanuts to shareholders,” he said.