By Ade Jacobs
Law Union and Rock has been delisted from the floor of the Nigerian Stock Exchange, NSE, following the buy-out of one of the nation’s top insurance companies by a firm, Kanuri LUR Limited.
The implication of this, according to experts, is that the shares of the insurance firm will no longer be traded on the floor of the NSE.
The deal was also believed to be part of the ongoing merger and acquisition processes in the insurance sector to raise new equity capital to meet new minimum capital requirements before next year as directed by the Nigerian Insurance Commission, NAICOM.
A report by the NSE on the transaction said, “We refer to our market bulletin of 16 October, 2020, with reference number: NSE/RD/LRD/MB56/20/10/16, wherein the market was notified of the full suspension placed on the shares of Law Union and Rock Insurance Plc to prevent trading in the shares of the company beyond the effective date of the scheme of arrangement by which Kanuri LUR Limited will acquire all the entire issued shares of Law Union.
“Following the conclusion of the above referenced scheme of arrangement, and sequel to the approval of the company’s application to delist its entire issued share capital from the Nigerian Stock Exchange, please be informed that the entire 4,296,330,500 outstanding ordinary shares of Law Union and Rock Insurance Plc were on Thursday, November 5, 2020, delisted from the daily official list of the exchange.”
The acquisition had been approved by the board of Law Union after receiving a binding offer from Verod Capital, seeking to acquire the entire 4.296 billion ordinary shares of 50 kobo each of Law Union at N1.23 per share valued at N5.28 billion.
The offer price of N1.23 per share represented a premium of 208 per cent on the 60-day volume weighted average share price and 140 per cent on Law Union’s closing share price on February 26, 2020.
NAICOM had, in May 2019, released new modalities for insurance companies to raise capital within a period of 13 months.
The regulator raised the minimum paid-up share capital of a life insurance company from N2 billion to N8 billion, non-life insurance from N3 billion to N10 billion, composite insurance from N5 billion to N18 billion and reinsurance companies from N10 billion to N20 billion.