Eaton Acquisitions Limited, an investment company, has increased its stake in NEM Insurance Plc to nine per cent. A total of 130 million shares of NEM Insurance were transferred in an off-market trade at N4 per share, representing a premium of 40.35 per cent against the closing share price of N2.85.
Off-market negotiated cross deals means that the deals were not subjected to the dynamics of price discovery for the particular period. Off-market trade implied that the deal was sealed outside the floor of the NSE. The negotiated cross deal platform of the Exchange is a special-purpose trading platform that is meant for voluminous transaction.
By the cross deal, it implies that the buyer and the seller had been prearranged and the transfer at the stock market was a mere perfection of the agreement between the two. The negotiated cross deal allows the parties to the deal to close the deal at reduced cost. Eaton is seeking to acquire 10 per cent of the insurance company. The latest acquisition puts it within a distance of its target.
Managing director, Eaton Acquisitions Limited, Mr. Olaleye Adeyinka, said the company increased its stakes in NEM Insurance because it offers strategic opportunities and growth. He said the investment firm intends to acquire more shares until it meets the mandate of its board to acquire 10 per cent of the company’s shares.
“There is no better option in the market from the perspective of effective leadership, strategic opportunities and reforms for growth in the industry, broad sharing holding base that engenders good corporate governance, and a network of current and potential shareholders for enhanced business development,” Adeyinka said.
He noted that though the investment firm cannot say much about the strategic vision of NEM Insurance yet as it is in the purview of management and the board, but it has unalloyed confidence in both organs of the company’s governance.
Adeyinka expressed confidence in the ability of current NEM’s leadership, noting that the investment firm is desirous of gaining board representation in view of its dominant shareholding stake in the company.