Capital Hotels Plc, owners of the Abuja-based luxury hotel, Sheraton, said 22 Hospitality Limited has procured 66.1 per cent of its outstanding shares in exchange for a controlling stake in the company.
A purchase of a company’s total issued shares crossing the 50 per cent threshold is deemed a buyout. Capital Hotels has not posted annual profit in the last two years.
The transaction is the end of a series of off-market deals conducted for months, and means Hans Gremlin Nigeria Limited will be yielding to 22 Hospitality Limited the ownership crown it had worn for two decades.
“All the required regulatory approvals have been received for the transaction,” Capital Hotels said in a statement posted on the Nigerian Exchange’s website.
Capital Hotels set out earlier in the year to raise capital for, what it said, was the renovation of the hotel.
The board sought to approach it by way of rights issue and made a proposal during an emergency general meeting in April to sell new shares to existing shareholders at N7 per share at a time a unit was selling for N3.19 in the market.
A refusal by shareholders to endorse the offer for fear it would erode their rights meant the board turned to private placement as a second option. In all, 1,611,995,510 shares were allotted to 22 Hospitality Hospital at N7 per unit when that was concluded, totaling N11.3 billion.
The company’s share price, which had been stuck at N3.19 for at least seven months to 23rd May, jumped to N3.40 that date but has not moved again ever since.
The share purchase transferred 51 per cent of the company’s outstanding shares to 22 Hospitality Limited.
“In addition, 22 Hospitality Limited also bought 456,641,337, and 21,562,293 Ordinary Shares of 50 kobo each representing 14.45% and 0.68% of the equity share capital of the Company, from Hans Gremlin Nigeria Limited and Associated Ventures International Limited respectively through Offer for Sale,” according to the statement.
Altogether, the new owner’s holding in the firm translates to 2,090,199,140 ordinary shares.
Bank of Industry Limited, Ministry of Finance Incorporated, Nigeria Re-insurance Corporation and Continental Energy Resources Limited are among the substantial shareholders of Capital Hotels, its 2021 audited financial statement shows.