Mandatory Take-over Bid by UAC of Nigeria Plc


1. What is the offer about?
 The transaction is a Mandatory Take-over Offer (“MTO” or “the Offer” or the “Transaction”) being initiated by UAC of Nigeria Plc (“UACN”) to acquire additional shares in Portland Paints and Products Nigeria Plc (“Portland Paints” or the “Company”) in compliance with the law.

2. Why is UACN making the offer?
 Following the acquisition of a majority equity stake in Portland Paints at a cash consideration of N4.47 per share in 2013, UACN is required to make a bid for all or part of the remaining shares held by the other shareholders in accordance with Section 131(1) of the Investments and Securities Act 2007.

3. How many shares of Portland Paints is UACN looking to acquire?
 UACN is looking to acquire up to 2 million ordinary shares in Portland Paints under the MTO at a price of ₦4.47 per share.

4. How come the mandatory takeover is being initiated now when UACN acquired the majority stake in June 2013?
 Post-acquisition, UACN focused on stabilizing the operations and liquidity of Portland Paints in the interest of all stakeholders.
 The MTO regulatory application process was initiated after the post-acquisition period but was interrupted with the broader urgent need to inject new capital into Portland Paints.  Portland Paints made a strategic decision to raise new capital from its existing shareholders via a Rights Issue.
 However, as the Rights Issue could not be executed simultaneously with the MTO, this further delayed the launch of the MTO.
 There was no stipulated statutory timeframe for implementing the MTO as at the time of the acquisition.

5. How many shares in Portland Paints does UACN currently own and how many will it own after the transaction?
 UACN held 71.71% equity stake in Portland Paints as at 10 November 2016.
 Post-Transaction and assuming full acceptances, UACN will hold 72.21% equity stake in the Company.

6. Is the MTO another Rights Issue?
 No, the MTO is not a Rights Issue.
 The MTO is an offer, by UACN, to existing shareholders to sell their shares for cash consideration subject to the Offer size while a Rights Issue involves capital injection by existing shareholders into the Company in consideration for additional shares.

7. Are other companies carrying out MTOs?
 Other companies have carried out MTOs in the past in compliance with the law.

8. Why is the MTO being carried out now, when Portland Paints has approval to undertake a Rights Issue?
 Portland Paints received shareholder approval for its proposed Rights Issue but is yet to obtain regulatory approval to implement the Rights Issue.
 The MTO is being carried out by UACN and has been approved by the regulators for implementation.

9. Does the MTO need to be made for the entire ordinary shares of Portland Paints or only the free float shares?
 The MTO is being undertaken by UACN (the largest shareholder of Portland Paints) as a result of its acquisition of a majority equity stake in Portland Paints.
 The law requires UACN to make a bid for either all, or for a portion, of Portland Paints’ shares.
 UACN has given consideration to a number of factors, including the overall liquidity of Portland Paints’ shares as well as not breaching the Nigerian Stock Exchange (“NSE”) free float requirements for Portland Paints in determining the number of shares to acquire under the MTO.

10. Is UACN looking to fully takeover Portland Paints, in this process, given that it owns 71.71% of the Company?
 No.

11. Do you think this is a fair price?
 There is a legal requirement for the offer to be made at the same offer price, ₦4.47, at which UACN acquired the majority equity stake in Portland Paints.

12. Will the offer price be increased if there are insufficient acceptances?
 No. UACN has no intention of changing the terms of the offer including the price.

13. Will UACN be making market purchases during the period of the MTO?  No.

14. Since only Qualified Shareholders will be entitled to sell their shares, what happens where there is an over-subscription?
 In the event the MTO is over-subscribed (i.e. the number of shares in respect of which the offer is accepted is more than the maximum of 2,000,000 ordinary shares), UACN will accept the shares tendered by Qualifying Shareholders on a pro rata basis in accordance with the law.

15. When will the offer close?
 The offer will be open for 21 days and will close on 13 December 2016.

16. Is there a timeframe for submitting Acceptance Forms after the Offer closes?
a. No. The deadline for the submission of Acceptance Forms is by 5:00 pm on 13 December 2016.