Law Union & Rock Insurance gets NSE nod to delist shares from Exchange
*To re-register as Private Company Limited by Shares
The Nigerian Stock Exchange (NSE) has approved Law Union & Rock Insurance’s application seeking voluntary de-listing of its shares from the main board of the exchange.
The Managing Director of the Company, Mr. Ademayowa Adeduro, who confirmed the development to our correspondent in a telephone interview today, said with this, the company will be re-registered as a private company limited by shares.
The company’s voluntary delisting became possible following the ongoing acquisition of the firm by Anglophone West Africa private equity firm, Verod
Capital Management.
Verod has offered N5.3 billion for the acquisition of the entire share capital of Law Union in a major bid that may signal the opening up of mergers and acquisitions in the Nigerian insurance industry.
The board of Law Union had said that it received a binding offer from Verod Capital seeking to acquire the entire 4.296 billion ordinary shares of 50 kobo each of Law Union at N1.23 per share. The offer thus valued Law Union at N5.28 billion.
The offer price of N1.23 per share represented a premium of 208 per cent on the 60-day volume weighted average share price and 140 per cent on Law Union’s closing share price on February 26, 2020.
Shareholders of the company had last month agreed to sell their stake in the
organisation to Verod Capital, at a unit price of N1.23.
At the Annual General Meeting (AGM) and the Court-Ordered Meeting (COM) held at the Muson Centre in Lagos, the shareholders said they are willing to collect the N1.23 per share being offered by the new investor.
The new owners have proposed to purchase the entire issued share capital of the firm in a transaction Implementation Agreement (TIA) through its investment vehicle, Kanuri LUR Limited.
Under the deal, Law Union and Rock Insurance agrees to transfer a total of 4,296,330,500 ordinary shares of 50 kobo each of the company to Kanuri
LUR or any other nominee of Kanuri LUR in consideration for a cash payment
at the rate of N1.23 per share to the shareholders.
This showed that all the shares in the company will become fully held by Kanuri LUR and its designated nominee. On the payment of the amount requested by shareholders, Law Union and Rock Insurance will be delisted from the main board of the NSE, while the registration of the ordinary shares of the company with the Securities and Exchange Commission (SEC) will be withdrawn and the firm will be re-registered as a private company limited by shares.
The company took such decision because of the new capital requirements introduced by the National Insurance Commission (NAICOM).
The apex regulator of insurance sector in Nigeria has directed all insurance and
reinsurance companies to increase their minimum paid-up capital.
Law Union and Rock Insurance which has N3 billion capital base expected to
increase it to N10 billion after conclusion of the transaction to enable it to remain in business.
According to Chairman of the firm, Remi Babalola, this decision was taken
to give better value to investments of shareholders in the company.
“Following negotiations with Kanuri LUR and further advice from its advisers,
the board resolved to recommend the proposal to the shareholders for their kind
consideration a meeting to be convened by an order of the Federal High Court.
“The board has further resolved to effect the proposal by way of a scheme
of arrangement under Section 539 of the Companies and Allied Matters Act (CAMA) Chapter C20, laws of the federation of Nigeria 2004 as your board believes that same will serve the best interests of both the company and its shareholders,” Mr Babalola said at the COM.
