Except by a miracle, all is set for the formal delisting of the entire 3,553,138,530 ordinary shares of Union Diagnostics and Clinical Services Plc from the Nigerian Stock Exchange (NSE), almost 14 years after it was listed in May 2007.
Preparatory to the eventual delisting of its shares from the Nigerian Stock Exchange (NSE), directors of the company have scheduled an extraordinary meeting of its shareholders at 12pm in Lagos on January 25, 2021. That meeting is expected to approve a bid by healthcare investment firm, Cedar Advisory Partners Limited, one of Union Diagnostics’ significant shareholders, to buy the entire 39.62% held by minority shareholders.
Cedar had in March last year launched the N492.75m buy-out bid expected to raise its stake to 59.66%, making it the single largest shareholder of the company.
Before the EGM, however, shareholders of Union Diagnostics will holds its annual general meeting at the same venue by 10 am to review its full-year performance for the period ended December 31, 2019.
Although separate notices of both meetings dated December 29, 2020, and filed with the NSE on December 31, by Dr. Samuel Iroye, its company secretary, were silent on the planned delisting, a source close to the diagnostics giant, confirmed it to our correspondent on Sunday night.
According to the notice of the court-ordered meeting, shareholders of Union Diagnostics are expected to approve the Scheme of Arrangement dated Monday, December 7, 2020, while authorizing the directors “to consent to any modifications of the Scheme of Arrangement that the Federal High Court or any regulatory authority may deem fit to impose or approve.”
Directors of Union Diagnostic had in March last year, confirmed receipt of a binding offer from Cedar, seeking to acquire a total of 1.408bn ordinary shares of 50 kobo each held by all minority shareholders at an offer price of 35 kobo, in addition to its current 711.92m units.
According to the audited financials for the year ended December 31, 2019, Dr. Olusola Akinniyi, the chief executive, held 233,462,131 units or 6.6%, down from 8.1% in the corresponding period of 2017; and Merrybome Investments Ltd, 272,997,974 shares or 7.7%, (held by Akinkoye Abiodun), same as in 2017. Other significant shareholders are: Foyin Chemist & Stores, 348m shares or 9.8% as in 2017; Senior Design Ltd, 453,798.638 shares, or 12.8%; and LifeCare Partners, 498m or 14.1%; while the stake held by other Nigerians, arising from the reduction in directors’ holdings jumped from 28.5% at the end of 2017 to 49% in 2019.
The offer price of 35 kobo per share represents a 75% premium on the company’s last closing price on March 16, 2020 and 70.1% on the 90-day volume weighted average share price. The shares however closed for the year 2020 at 31 kobo, one kobo drop from previous day’s 52-week high, following which the scheme price now represents 12% premium.
At the January 25 EGM, the shareholders are expected to approve that the Scheme shares be transferred to Cedar Advisory Partners Limited; and holders paid the agreed cash consideration of 35 kobo each.
The AGM has as ordinary business to receive and consider the report of the directors, the audited financials for the year ended December 31, 2019, together with the reports of the auditors thereon; re-elect directors retiring by rotation; elect members of the audit committee and authorize the directors to fix the remuneration of the auditors.
Union Diagnostics has been unable to achieve its enviable plan to dominate the market, with at least one branch in each state of the country, because of the influx of smaller competitors into the market.
Investdata News recalls that shares of the company was listed at N3.00 each, and had plans to become the nation’s leading diagnostic firm across the West Africa sub-region, with a vision to become a global player.
Information available on its website says Cedar Advisory is engaged in investment banking, CFO outsourcing services, insurance brokerage, legal compliance services, business performance management, and due diligence service. It has as part of its completed transactions the acquisition of 75% of Great Nigeria Insurance Plc by Insurance Resourcery Consulting Services Limited in 2013, raising US$20m to finance the management buyout. GNI eventually delisted voluntarily from the NSE in 2019, a move for which Cedar acted as an adviser, coordinating all relevant parties to the transaction.
