By Rosemary Onuoha
Shareholders of Law Union and Rock Insurance Plc have accepted an offer of N1.23 per share for every 50 kobo ordinary share held from the new owner of the company, Verod Capital Management.
The Board of Law Union and Rock secured the exit payment from its new investor in the quest to get full value for the investment of shareholders of the company.
The agreement for the exit payment was reached by the Board and shareholders at Law Union and Rock Insurance 51st Annual General Meeting and Court Ordered Meeting held recently in Lagos, where the Scheme of Arrangement for the proposed acquisition of the company was discussed.
The development is due to the mandatory regulation by the National Insurance Commission (NAICOM), increasing the minimum paid-up share capital of all insurance and reinsurance companies with a deadline of June 30, 2020.
Based on this, the minimum paid-up capital of Law Union and Rock was increased from N3 billion to N10 billion.
However, the proposed transaction as contained in the TIA is expected to involve the transfer of a total of 4,296,330,500 ordinary shares of 50 kobo each of law Union held by the scheme shareholders to Kanuri LUR or any other nominee of Kanuri LUR in consideration for a cash payment of N1.23 per share to the scheme shareholders, following which all the shares in the company will become fully held by Kanuri LUR and its designated nominee.
Subsequently and upon the scheme becoming effective, Law Union will be delisted from the main board of the Nigerian Stock Exchange, the registration of the ordinary shares of the company with the Securities and Exchange Commission will be withdrawn and the company will be re-registered as a private company limited by shares.
Chairman, Law Union and Rock Insurance, Mr. Remi Babalola during the Court Ordered Meeting which followed the AGM stated that the company initially explored merger discussions with other insurance companies and communicated initial recapitalisation plan to NAICOM.
He however noted that they found that the shareholders of Law Union would not maximise shareholder value if such merger discussions crystallised, which led them to seek more optimal avenues for shareholders to get better value for their investments in the company, through acquisition by Verod, using the Kanuri LUR SPV.
The Managing Director, Law Union, Mr. Ademayowa Adeduro, on his part said historically, the Company has performed excellently especially since its acquisition by the consortium of investors (Alternative Capital Partners and Swanlux Solutions and Services Limited in 2012), who embarked on a transformation and restructuring process that has enabled the Company align its offerings to the unique needs of the various sectors of the economy.
He said that the move led to the turning around of the Company from a loss-making position of Nl.3 billion in the financial year-end 2012 to profitability of N250 million in the following year and this has grown to N860 million in 2019.