Africa’s largest cement manufacturer, Dangote Cement has sold about 2.3% of its shareholding to foreign investors.
According to Reuters, the deal for the 2.3% stake in Dangote Cement was valued at NGN86.1 billion which is approximately USD236 million using real time Forex rate.
According to a stock exchange source who spoke to Reuters, about 416 million shares of Dangote Cement were sold on Tuesday at NGN210 each in six off-market deals negotiated between Stanbic IBTC and Meristem stockbrokers.
According to Reuters’ data, the selling price was below Dangote Cement’s closing price on Monday of NGN223.75. Shares in the company, owned by Africa’s richest man Aliko Dangote, jumped after news of the share sale, closing up 7.3 percent at NGN240, valuing the company at NGN4.09 trillion ($11.2 billion).
A spokesperson for Dangote Cement said the transaction was between Dangote Industries Limited and some foreign investors, whom he did not identify.
The transaction increases Dangote Cement’s free float to 10.4 percent according to Thomson Reuters calculations, still well below a stock market requirement of 20 percent.
Dangote Cement is the biggest company on the Nigerian Stock Exchange, accounting for a third of the NSE’s total market capitalisation, and when it listed in 2010 the bourse waived its free float requirement because it wanted to encourage more companies to list.
It gave Dangote 18 months to reach the 20 percent level but a banking source said the company has still yet to meet its minimum float requirement as local investors dislike its high valuation and foreign investors have been deterred by a currency crisis in Nigeria.
In 2013, Dangote Industries sold 1.5 percent of its 95 percent stake in Dangote Cement to South Africa’s Public Investment Corporation (PIC) for $289.3 million.