Oando has a buyer
Oando recently disclosed that it had received an offer from its core shareholder, Ocean and Oil Development Partners Limited (OODP). OODP, with its 57.4 Percent holding, is seeking to buy out all remaining shareholders and take the company private.
OODP is offering a purchase price of 7.07 Naira per share, a price 58 per cent higher than the share price on the day they announced the intention to purchase. The bid's success is subject to a shareholder vote and approval by the federal high court.
So what?
As a Public Company, Oando has faced issues with investors and regulators. A coalition of its investors protested the sale of its retail business to the NNPC 2022, and it faced suspension in 2018 from the Nigerian and Johannesburg Stock exchanges. Those sanctions and profitability issues in 2020 because of Covid-19 have put the company in a precarious position. All these mean that the company needs a serious overhaul, and this is where delisting comes in.
The plan by the company's principal shareholder OODP to take the company private makes sense. It will remove the company from public scrutiny and give more flexibility for a more holistic turnaround without the volatility of the public market. Also, the 58 per cent premium on the last trading price signifies that OODP is confident they will turn things around.