Minority shareholders have called for a more active collaboration with capital market regulators to strengthen investors’ protection and confidence in the market.

This comes as the Securities and Exchange Commission (SEC), yesterday, rejected plans by PZ Cussons (Holding) Limited to acquire shares held by other shareholders of PZ Cussons Nigeria and delist from the stock exchange.

PZ Cussons(Holding) Limited intended to buy the shares held by other PZ Cussons Nigeria shareholders at N23 per share, contrary to minority shareholders’ insistence that the offer arrangement should be pegged at N40 instead.

The company had also applied with the Securities and Exchange Commission in November 2023 for its no-objection to the proposed scheme. But in a letter signed by the company’s Secretary, Olubukola Agaga, titled, ‘PZ Cussons Nigeria Plc: Announcement regarding the Securities and Exchange Commission response to PZ Cussons (Holding) Limited’s offer to acquire shares held by other shareholders of PZ Cussons Nigeria’, the company notified shareholders that the SEC had declined the company’s request for its no objection to the majority shareholders intention to acquire shares held by the other shareholders at an offer price of N23 per share.

The shareholders who spoke in a chat with The Guardian insisted that the offer price should be pegged at N40 per share against the majority shareholders’ proposal of N23 per share.

According to them, a debt-equity arrangement should be adopted in a situation where the board is not willing to accept the N40 per share proposal by the minority shareholders.

The shareholders noted that the debt-equity conversion would ultimately result in delusion of shares of minority shareholders but it was a preferred option to the company’s outright delisting from the stock exchange.

President of NewDimension Shareholders Association, Patric Ajudua said the development has reinforced the need for a strong collaboration between the regulatory authorities and the shareholders.

“We reject the N23 offered to minority shareholders as pay off, rather we propose N40 as the offer price. We also accept debt equity conversation which of course will lead to dilution of shares and that invariably will affect minority shareholders but we believe that as the economy improves, the company will improve to increase shareholders’ value on investment.

“We are very delighted at the news of the rejection notice to the application to delist. It is a clear indication that the SEC is alive to its primary responsibility of protecting minority shareholders.

“The management of PZ represented by the majority holder of PZ (UK) had sought to short-change the minority shareholders through delisting with an offer price of N23 against the request that the offer should be moved to N40 to reflect the price in the stock market.

“They have consistently nursed the idea of leaving Nigeria just as they did in Ghana by surreptitiously selling off the assets of the company. Over the last four years, they have consistently received N6 billion annually as payment for Global shared services support and Technical know-how, Research & development support trade and management fees.

He added: “They have also received 73.27 per cent of dividend declared as represented by their holdings. They are also holding key positions such as GMD, CFO, supply chain director and procurement director at the detriment of Nigerians who have the same qualifications and capability.

“The issue of FX losses has created a better opportunity for them to accomplish their agenda to exit Nigeria. We would like to place on record our collective desire as shareholders of quoted firms to protect our common interest and ensure that we are not short-changed.”

The plan to exit the Nigerian market is not unconnected with the nation’s lingering macroeconomic challenges, especially the issue of foreign exchange which has continued to shrink the listed firm’s profitability and dividend payout.

For instance, PZ Cussons Nigeria recorded N44.5 billion exchange rate loss for the first quarter of the new financial year ending August 2023, plunging the company into an operating loss of N40.2 billion for the period in question.

This was against N734.9 million operational profit reported just one year prior.

The period ended with the company incurring a loss after tax of N38.6 billion, a significant deviation from the N1.4 billion profit achieved in the corresponding period of the previous year.

Also, the company in its 2024 interim result for the six months ending 2nd December 2023, reported an FX loss of £88.2 million as a result of the devaluation of the naira.

With the development, the Board agreed to slash dividend payments from 2.67 per cent in H1 2024 to 1.50 per cent representing a decline of 43.8 per cent.

The Chief Executive of PZ Cussons, Jonathan Myers speaking on the company’s financial performance stated: “The most significant challenge we have faced by far has been the devaluation of the Nigerian Naira, which is today around 70 per cent weaker than a year ago, representing the biggest drop in the currency’s history.”

“As we set out in September 2023, macroeconomic developments in Nigeria would be the key determinant of the Full Year (FY) 24 results. Whilst we continue to make good progress in managing this volatility, the further devaluation in recent weeks will inevitably impact our FY, 24 results.”