Seplat Petroleum Development Company Plc has confirmed that it made preliminary approach to Afren Plc for a possible merger.
Afren, which is one of the leading oil firms playing in the Nigerian economy, and also listed on the London Stock Exchange (LSE) had last month announced the move by Seplat regarding the merger talk but said it was still at preliminary stage.
Seplat yesterday formerly notified the Nigerian Stock Exchange (NSE) regarding the plan.
“Seplat has, in accordance with the provisions of Section 10 of the Amended Listing Rules of the NSE, notified the exchange of the announcement by Afren Plc) dated 22 December 2014. Seplat confirms that it has made a highly preliminary approach regarding a possible combination with Afren. Seplat however notes that there can be no certainty that an offer will be made or as to the terms of any offer,” the NSE said on Thursday.
According to the NSE, Seplat acknowledged that in accordance with Rule 2.6(a) of the UK City Code on Takeovers and Mergers, by no later January 19, 2015, it must either announce a firm intention to make an offer under Rule 2.7 of the code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the code applies.
Seplat added, however, that this deadline can be extended with the consent of the UK Takeover Panel in accordance with Rule 2.6(c) of the Code. The company noted that further details could be provided at this stage due to the highly preliminary status of events but assured that further announcements would be made as soon as there is the need.
Afren had last month said it “received a highly preliminary approach” from Seplat “regarding a possible combination.” However, warned that there was “no certainty that an offer will be made or as to the terms of any offer.”
However, it is believed that Seplat-Afren deal has the potential to begin a round of consolidation among Nigeria’s homegrown oil companies, that have witnessed significant growth past few years through the acquisition of assets from the bigger international oil companies(IOCs).
Seplat is sitting on a large cash after its $500 million initial public offerings in Lagos and London last April.
Renaissance Capital, a leading international investment banking and research firm, had last October rated Seplat high, saying the company was strongly positioned to capture upcoming non-organic growth opportunities and could possibly complete one or two deals in the next 12 months. – Thisday.
