The recent announcement by Titan Trust Bank Limited and Ocean and Oil Development Partners Limited (OODP) to acquire all the shares of minority shareholders in Union Bank Plc and Oando Plc respectively has been met with dissatisfaction by some minority shareholders. The shareholders have expressed their discontent with the exit price offered by the majority shareholders, which they feel is unacceptable.
In response to this development, the President of the New Dimension Shareholders Association, Mr Patrick Ajudua, has called for the fair treatment of minority shareholders in their exit plans. He has also called on regulators to ensure that the interest and protection of minority shareholders are paramount in their hearts, particularly in the given approval of the scheme of delisting.
The National Coordinator of the Independent Shareholders Association of Nigeria (ISAN), Mr Moses Igbrude, also expressed his concern about how Union Bank and Oando Plc would conclude to pay shareholders N7.00 and N7.07, respectively, as an exit price. He lamented the paucity of returns over the years and suggested minority shareholders have been left worse off due to a lack of dividend payments and a reduction in shareholder value.
Igbrude called on the Nigerian government to intervene and protect minority shareholders from core investors who are fellow Nigerians. He plans to protest at the Extraordinary General Meetings (EGMs) but has also urged that they should not be conducted virtually. He believes that a virtual EGM could potentially put the bank at an advantage in stage-managing the meeting and obtaining “undeserved approval” for the exit plan, which he feels would not fairly compensate minority shareholders who have suffered from non-consistent dividend and bonus issues over the years.
The concerns expressed by minority shareholders are valid and should be taken into consideration by the majority shareholders and regulators. It is essential to ensure that the interest and protection of minority shareholders are paramount in any delisting or exit plan. Fair treatment of minority shareholders is critical in giving shareholders value for the share purchase, and the exit price must be satisfactory to them.
Furthermore, the Nigerian government must take proactive measures to protect minority shareholders’ interests and prevent core investors from taking advantage of them. It is important to have transparent and fair processes in place to ensure that minority shareholders are adequately compensated for their shares.
In conclusion, the concerns raised by minority shareholders regarding the scheme of arrangement proposed by Titan Trust Bank Limited and Ocean and Oil Development Partners Limited (OODP) to acquire all the shares of minority shareholders in Union Bank Plc and Oando Plc respectively must be taken seriously. Fair treatment of minority shareholders is essential, and regulators must ensure that their interest and protection are paramount in any delisting or exit plan. The Nigerian government must also take proactive measures to protect minority shareholders’ interests and prevent core investors from taking advantage of them.
