On February 6, 2023, Ardova Plc issued a cautionary announcement, notifying the Nigerian Exchange and the investing public about an offer made by Ignite Investments & Commodities Limited, the majority shareholder holding over 74% of Ardova Plc shares. The offer proposes acquiring the shares of minority shareholders at a price of N17.38 per share through a scheme of arrangement. Additionally, Ignite Investments expressed its intention to delist Ardova Plc from the Nigerian Exchange upon completion of the scheme.

Based on the corporate disclosure and scheme of arrangements documents analyzed by our team, it has been confirmed that the scheme of arrangement proposed by Ignite Investments & Commodities Limited has obtained a “No Objection” from the Securities and Exchange Commission (SEC). Furthermore, a court-ordered board meeting was held yesterday, May 31, 2023. This meeting signifies a significant step in the process of implementing the scheme of arrangement. 

While we await confirmation of the outcome of the court ordered board meeting, below are some points to note:

• The Board and Management of Ardova highlighted recent operational challenges that have impacted the performance of the business and its ability to make attractive returns to shareholders citing the decline in security’s price on the exchange over the past 5 years as well as the decline in its dividend yield.
• The Board and Financial Adviser, Stanbic IBTC Capital, in the scheme document highlighted the need for capital injection into the business and the consideration of the most appropriate funding method for the company.
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• The conclusion of their analysis is that the majority shareholder will be better positioned to take strategic decisions, raise funds and drive the company’s operations by buying out the minority shareholders and delisting from the exchange.
• They also stated that the company will be unable to make attractive returns to shareholders in the near term and advice minority shareholders to consent to the scheme.
• According to the proposed timelines in the scheme document, June 22, 2023, will be the last trading day on the Nigerian Exchange.
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• Ardova will be delisted from the Nigerian Exchange on June 29, 2023.
• Though the dates were stated as indicative, we believe the transaction is on track to meet these timelines. 

Our View:

We advise shareholders holding Ardova to review their holding costs and take position as appropriate in line with the advised rate of N17.38.