No doubt Tiger Brands Limited, a leading South African fast moving consumer goods company becomes majority shareholder of Dangote Flour Plc after acquiring 70 per cent of the flour company in September 2012.
Despite acquisition of major stake by Tiger Brands, the name Dangote Flour still remains and Alhaji Aliko Dangote was the chairman of the company until Monday, September 16, 2015.
In September 2012 Tiger Brands Limited, sought to increase its stake in Dangote Flour Mills to 70 per cent. Tiger Brands currently holds 63.35 per cent, following Dangote Industries Limited divestment of 3.67 billion ordinary shares to the South African firm last year for $181.9 million.
However, a regulatory filing at the Nigerian Stock Exchange (NSE) in 2012 by Tiger Brands indicated that the company wants to buy additional 332.5 million ordinary shares of 50 kobo each at a N9.50 per share from minority shareholders of Dangote Flour Mills.
Additional 332.5 million shares would bring the total holdings of Tiger Brands to 3.5 billion shares, which is 70 per cent of the 5.0 billion paid up shares of Dangote Flour Mills.
At the conclusion of the proposed transaction, Dangote Industrial Limited retained its 10 per cent, Tiger Brands 70 per cent, while other investors have 20 per cent.
Dangote Group had explained that the decision to divest was in furtherance of Dangote Industrial Limited’s optimisation and diversification objective and relates specifically to its going forward strategies for Dangote Flour Mills.
Dangote Flour Mills Plc has 5 billion shares outstanding while its share price was N2.41 kobo per share as at Monday this week, bringing the market capitalization of the company to N12.050 billion.
Just on Monday, Tiger Branded Consumer Goods Plc filed interim announcement to the Nigerian Stock Exchange advising shareholders that Tiger Brands Limited has informed the board of directors of Tiger Branded Consumer Goods Plc of Tiger Brands Limited’s decision not to provide any further financial support with respect to its investment in Tiger Branded Consumer Goods Plc and also informed the board of Tiger Branded Consumer Goods Plc that it is currently exploring various alternatives with regard to its investment in Tiger Branded Consumer Goods Plc.
This decision, according to a source triggered resignation of Alhaji Aliko Dangote, Mr. Olakunle Alake, Mr. Asue Ighodalo and Mr. Arnold Ekpe from their appointments as directors of Tiger Branded Consumer Goods Plc.
Commenting on the resignation of some board members, a shareholder leader, Boniface Okezie, said there won’t be any negative implication if the owner of the company knows what they are doing.
According to him, Aliko Dangote has reduced his stake to 10 per cent and there is no need to be on the company’s board again.
“What Tiger Brands needs is to build strong brand that can compete with Flour Mills of Nigeria, the leader in the industry.”
Another shareholder leader, Mikail Shehu Malami, said the resignation is long overdue as Dangote is no longer majority stakeholder.
He believed that the flour mill company deserves to be a market leader in flour milling due to Dangote pedigree but far behind Flour Mills of Nigeria.
He said Dangote’s resignation from the board is a challenge for the new owner to prove to Nigerians that they have what it takes to drive the company.
DailyTrust
