By Goddy Egene
The Managing Director of Chemical and Allied Products (CAP), David Wright, has said the company’s merger with Portland Paints and Products Nigeria (PPPN) Plc will create better value for all stakeholders as well as the economy at large.
The Boards of Directors of CAP Plc and PPPN had last year announced the decision to merge their respective businesses in accordance with applicable laws.
Speaking at the virtual, ‘Facts behind the merger’ presentation at the Nigerian Stock Exchange (NSE), Wright said stakeholders should expect the emergence of a better company that would benefit all.
According to him, he was excited by the prospect of an enlarged company with a broader decorative paint portfolio covering the premium, mid-market and affordable segments and the inclusion of marine and protective coatings, all of which will benefit their customers and shareholders.
Also speaking, the Managing Director of PPPN , Bolarin Okunowo, said the company had evaluated various strategic options with a view to positioning to capture emerging growth opportunities.
“CAP Plc’ business is complementary to ours and both companies will be better able to serve our respective customers by coming together. I believe the combination of PPPN and CAP Plc will yield significant benefits for all of our stakeholders,” she said.
Wright explained that the merger, which provides a unique opportunity to change the Nigerian paints and coatings landscape, will be attractive and value accretive to shareholders of both companies.
“CAP Plc and PPPN play in distinct segments, and the enlarged CAP Plc will have a broader portfolio covering the top-end/premium decorative segment, the mid-market decorative segments as well as the industrial segment (in particular marine and protective coatings),” he said.
The merger will involve the transfer of all PPPN’s assets, liabilities and business undertakings including real property and intellectual property rights to CAP Plc.
In consideration for the transfer, CAP Plc is offering shareholders of Portland Paints a choice to receive N2.90 cash for every Portland Paints share held or one new ordinary share of CAP Plc, credited as fully-paid up for every eight PPPN.
CAP Plc will be the surviving entity and PPPN will be dissolved without being wound up and will be delisted from the NSE.
Meanwhile, trading at the stock market continued on bearish note as the NSE All-Share Index fell by 0.13 per cent to close at 41,510.16. Similarly, market capitalisation shed N28.3 billion to close at N21.7 trillion.