Dangote Cement, Nigeria's Biggest, to Sell $3.5 Billion Stock Over 2 Years
Dangote Cement, Nigeria's Biggest, to Sell $3.5 Billion Stock Over 2 Years
Dangote Cement Plc, Africa’s biggest producer of the material by capacity that listed in Nigeria today, will sell as much as $3.5 billion in shares in public offerings over two years, Afrinvest (West Africa) Ltd. said.
Dangote will sell 25 percent of its stock in total and the Nigerian Stock Exchange has given approval for the quantity of shares to be sold over 24 months, Afrinvest Managing Director Godwin Obaseki told reporters in Lagos today.
Dangote listed 15.5 billion ordinary shares at 135 naira each today, giving the company a market value of 2.09 trillion naira ($13.8 billion) and making it the biggest on the West African nation’s bourse, overtaking Nigeria Breweries Plc.
All demand for stock, including an initial 100 million on sale today, was met at 135 naira, Obaseki said. Trading took place for five minutes before the exchange closed at 1 p.m. in Lagos, with 196 million shares changing hands, according to data compiled by Bloomberg. Afrinvest introduced the shares to the West African nation’s bourse.
Dangote Cement’s share sale would be the biggest in Africa, surpassing the $903 million raised by Maroc Telecom in 2004 and $812 million by Safaricom Ltd., a Kenyan mobile-network operator, in 2008, according to data compiled by Bloomberg. The company plans to raise capacity more than fivefold by 2015 to 46.2 million tons through investment in other African countries and Nigeria as the continent’s nations build roads, houses, bridges and railways, creating demand for the building material. Dangote has $2 billion to raise capacity, Chairman Aliko Dangote said in a recorded interview broadcast on CNBC Africa today.
Demand
In Nigeria, the continent’s most populous country and top oil producer, demand is said to grow an average 10 percent annually, Lagos-based Access Bank Plc wrote in a May report.
The Nigerian Stock Exchange’s requires that a minimum of 25 percent of the securities are available for trading, Oluwakemi Owonubi, head of research at Lagos-based Vetiva Capital Management Ltd., said in an interview today. Dangote is 96 percent owned by Dangote Group, which is controlled by Aliko Dangote, a Nigerian billionaire.
Dangote Cement will start selling the shares in about 18 months and will first sell American depositary receipts, the 53- year-old chairman said in a speech in Lagos today. The shares sold today are those that will continue to trade until the offerings are concluded, he said.
‘Buy’ Rating
Stanbic IBTC Bank Plc, the Nigerian unit of Standard Bank Group Ltd. initiated coverage of Dangote Cement with a “buy” recommendation and a 12-month price estimate of 170.50 naira per share, analyst including Adenrele Adesina wrote in an e-mailed note to clients.
“Dangote Cement is cheaply priced, trading on a 2012 earnings multiple of 7.9 times versus our universe of Nigerian cement companies, which trade at 9 times,” the analysts wrote.
Dangote reported a 67 percent increase in profit for the nine months through September to 75.3 billion naira ($495 million) on Oct. 20.
To contact the reporter on this story: Vincent Nwanma in Lagos at vnwanma@bloomberg.net.
To contact the editor responsible for this story: Antony Sguazzin in Johannesburg atasguazzin@bloomberg.net.
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