NIPCO launches $16m offer for Mobil Oil shares

NIPCO Plc has launched a N4.84 billion ($16m) offer for the shares it needs to take its stake in Mobil Oil to 70 percent to comply with Nigerian takeover rules, its advisers said.

NIPCO’s investment subsidiary bought 60 percent of Mobil Oil Nigeria from Exxon Mobil Corp. in October 2016, when the US giant pulled out of downstream fuel distribution in Nigeria to focus on upstream exploration with higher margins, especially given the backdrop of lower crude prices.

NIPCO now owns 66.7 percent of the fuel retailer.

It is offering minority shareholders N417.12 per share for the 3.23 percent of the capital, or 11.6 million shares, it needs, the same price it paid Exxon last year and a 75 percent premium to current market price of N238.36.

Shares in Lagos-listed Mobil Oil have lost 10 percent this year, giving the company a market value of N85.95 billion. The shares rose 74 percent last year.

Nigeria exports nearly 2 million barrels of oil a day but imports the bulk of its refined products because its refining capacity is unable to meet the country’s daily fuel needs of about 40 million litres.

Mobil was founded in 1951 and operates more than 200 petrol stations in Nigeria. It also owns three plants that manufacture lubes, petroleum jelly, and insecticides in Nigeria’s commercial capital of Lagos.