November 04, (THEWILL) – GlaxoSmithKline Consumer Nigeria Plc will pay its shareholders N17.42 for every share held as per the proposed Scheme of Arrangement for the dissolution of the company.
GlaxoSmithKline, the UK-based pharmaceutical giant earlier announced on August 3, 2023, that it would be leaving Nigeria and shutting down its Nigerian subsidiary, GlaxoSmithKline Consumer Nigeria Plc, subject to approval from the regulatory authorities.
According to the statement signed by the company secretary, Frederick Ichekwai, the company has received a “No Objection” from the Securities and Exchange Commission to propose a Scheme of Arrangement for its shareholders.
The proposed scheme of arrangement notes that all the company’s outstanding shares will be canceled and all its existing shareholders except GSK UK will be settled at a premium of N17.42 for every share they hold.
According to the statement, it is noted that the scheme’s terms and conditions are outlined in the Scheme Document, which will be sent to all shareholders after the Federal High Court orders the convening of a Court-Ordered Meeting of the Company’s shareholders.
A scheme of arrangement is a legal agreement between a company and its shareholders or creditors, typically used for reorganizing the company’s structure or altering its financial obligations.
It requires court approval and involves a proposal that must be approved by the majority of shareholders or creditors to become legally binding.
GSK UK currently holds about 555,081,925 shares (or 46.42% stake) of GSK Nigeria through its proxies, Setfirst Limited and SmithKline Beecham Limited.
However, according to the statement, the company has opted out of the cash distribution.
As of November 3, 2023, GSK’s shares were trading at N12.40 at the NGX, representing a year-to-date appreciation of 101.6%.
GSK opened its office in Nigeria on July 1, 1972, and has been a critical part of the Nigerian pharmaceutical ecosystem, manufacturing household names such as Panadol, Lucozade Boost, Sensodyne, Ribena, Ventolin, Andrew Liver Salts, and Macleans, among others
The parting price translates to a premium of N12.40 per share for the Nigerian shareholders.
The exit of the firm has been used as a pointer to Nigeria’s increasingly challenging environment.
It negates the much-touted claim of a robust domestic climate by leaders embarking on globe-trotting hunt for foreign investors.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
