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Mobil Oil Shares Rise 55% in One Week on Renewed Demand
By Goddy Egene
Holders of the shares of Mobil Oil Nigeria Plc last week witnessed an unprecedented jump in their investment following renewed demand for the equity at the stock market. The shareholders saw their investments surge by 55.1 per cent in five days. Specifically, the stock soared by N115.16 from N208.97 to close at N324.13 per share.
Although most of the oil stocks appreciation was in reaction to developments in the global oil market where OPEC members reached an agreement to cut production by 1.2 million barrels per day, market operators said Mobil was bolstered by the decision of Nipco Plc to acquire 60 per cent equity stake in the firm.
While Nipco had executed a Sales and Purchase Agreement with ExxonMobil on Monday 17th October, 2016 for the acquisition of the 216,357,157 shares, there were some elements of doubt over the success of the deal.
However, more certainty came in last Tuesday when the Chairman/Managing Director of Mobil Oil Nigeria, Adetunji Oyebanji said Nipco was acquiring those shares for a consideration of $301 million(N91.8) subject to price adjustments for dividends and other factors.
The Managing Director of Nipco, Mr. Venkataraman Venkatapathy had said the company considered this acquisition an important synergy.
“It is part of our strategic move to support Nipco’s continuous growth and expansion of its Nigerian retail footprint. We are confident of adding tremendous value to Mobil Oil Nigeria and likewise Mobil Oil will add a huge value to Nipco. In furtherance of this value addition, Nipco will continue to maintain the Mobil brand on its retail outlets as well as continue to blend and sell the Mobil brand of lubricants under Branding Licence(s) from ExxonMobil,” he said.
According to him, Mobil Oil will continue to run as a separate, distinct and independent company ,from Nipco Plc, each with its own CEO who will report to its board of directors .
“In furtherance of this transition, Mobil Oil will continue to maintain the Mobil brand at its retail outlets as well as blending and selling Mobil brand of lubricants under branding licensee [s] from ExxonMobil. In essence Mobil Oil will continue as usual and therefore the change should be smooth and seamless,” he added.
Venkatapathy expressed profound gratitude and appreciation of Nipco to ExxonMobil for selecting the company as the preferred bidder for the acquisition of the shares.
We wish to give every assurance to ExxonMobil that having entrusted us with this invaluable asset (Mobil Oil), we will ensure full brand compliance with ExxonMobil’s global standards as well as rigorously sustain and follow ExxonMobil’s code of conduct/ethos and operational excellence,” he said.