Recall that Chemical and Allied Products was set to take over Portland Paints’ assets, liabilities, and business undertakings including its real property and intellectual property rights.

With the deal, both companies are evaluating merging their businesses together. And as a result, shareholders of Portland Paints will be paid by cash or share in CAP.

According to a statement, Okunowo stated that “In recent months, the Board and management of Portland Paints have evaluating various strategic options with a view to position our company to capture emerging growth opportunities. CAP’s 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 Portland paints and CAP will yield significant benefits for all of our stakeholders.”

In response to the proposed deal, the Managing director of CAP, David Wright said: “The decision to pursue the proposed Merger is driven by the board strategic plan to aggressively grow within the Nigerian and African markets. We believe that the proposed merger presents a unique opportunity that will benefit all stakeholders, from shareholders to customers as well as the broader community;

I am 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 our customers and shareholders.”

What Portland paints’ shareholder gain from merger?

With the merger still subject to regulatory and corporate approvals, a sum of  NGN2.90 kobo cash for every Portland Paints share held or receive 1 new ordinary share of CAP, credited as fully-paid up for every 8 Portland Paints shares held has been offered to shareholders of Portland Paints – a subsidiary of UAC.

While giving reasons for the price offer in a joint statement, the duo companies said, “The proposed consideration represents a 45% premium to the last traded share price of Portland Paints on October 16, 2020, being the last business day prior to the date on which CAP sent its merger proposal to the Board of Portland Paints and a 41% premium on the trading price as at close of trading on October 23, 2020.”

What you need to know about the proposed merger

The proposed deal which still awaits share holders and regulatory approvals will better position the company and enable Portland paints capture emerging growth opportunities.

Once the merger is approved, Portland Paints will no longer exist, as CAP will become the identity of the new entity. Portland Paints’ assets, liabilities and business undertakings including its real property and intellectual property rights will be transferred to CAP.

The post Portland Paints, CAP MDs React To Proposed Acquisition Deal appeared first on Business News in Nigeria.

According to a statement made available to Unmask NG, CAP is set to take over Portland Paints’ assets, liabilities, and business undertakings, including its real and intellectual property rights.

As seen in the statement, the deal will be “Executed by way of a Scheme of Merger, in line with the Section 711 of the Companies and Allied Matters Act, 2020 and other applicable laws, rules and regulations.”

What Portland Paints Shareholders stand to gain?

With the merger still subject to regulatory and corporate approvals, a sum of  NGN2.90 kobo cash for every Portland Paints share held or receive 1 new ordinary share of CAP, credited as fully-paid up for every 8 Portland Paints shares held has been offered to shareholders of Portland Paints – a subsidiary of UAC.

While giving reasons for the price offer in a joint statement, the companies said, “The proposed consideration represents a 45% premium to the last traded share price of Portland Paints on October 16, 2020, being the last business day prior to the date on which CAP sent its merger proposal to the Board of Portland Paints and a 41% premium on the trading price as at close of trading on October 23, 2020.”

Meanwhile, the Federal Competition and Consumer Protection Commission, the Securities and Exchange Commission, the Nigerian Stock Exchange (NSE) as well as shareholders of CAP and Portland paints have to approve the deal regardless of the offering price to acquire the company. It should be noted that The Proposed Merger is also subject to the sanction of the Federal High Court.

Why The Deal Is Important To CAP And Portland Paints

Asides from the fact that both companies believes that the deal will provide an extraordinary opportunity to turn around the Nigerian paints and coatings landscape or add value to their shareholders, they believe that it will drive growth within the Nigeria and Africa market.

The join statement revealed continued: “The decision to pursue the Proposed Merger is driven by the strategic objectives of the Boards of CAP and Portland Paints to drive growth and expansion within the Nigerian and African markets;

“CAP and Portland Paints play in distinct segments, and the enlarged CAP 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). We believe that the Proposed Merger will provide our customers access to a broader product portfolio and a wider range of value options to meet their needs;

“The combination of CAP and Portland Paints will create a formidable paints and coatings company that will be strategically positioned across segments as a result of its combined brand portfolio (Dulux, Sandtex, Caplux and Hempel); its diversified product ranges spanning decorative and industrial with widespread distribution channels and retail footprint in Nigeria.”

Meanwhile, the proposed merger between Portland Paints and Chemical and Allied Products, CAP will remain as the brand name.

What you should know

Established in 1965, CAP manufactures and distributes paints, personal and household products, crop protection and public health product. The company also deals in decorating and renovating services. It products ranges from Dulux paint, Sandtex, Caplux to Hempel.

On the other hand, Portland paints which was established in 1985, is one of the major players in the Nigerian paint industry. It manufactures and sells a wide range of paint for decorative, automotive, industrial, marine, protective coating sectors purposes.

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