Rainoil becomes majority owner of Eterna Oil after buyout of 61% interest

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Energy firm Rainoil Limited purchased a 61 per cent holding in rival Eterna Oil Plc via an indirect acquisition that saw seven of the latter’s substantial shareholders give up their shares in exchange for negotiated cash.

The deal, the culmination of more than 10 months of talks, hands Preline Limited (the special purpose vehicle commissioned by Rainoil to execute the acquisition) about 794.970 million ordinary shares, enabling a relatively obscure oil and gas company to buy more than three-fifths of a quoted energy company.

That eases the path for Rainoil to formally launch a takeover bid any moment from now.

No mention has been made of the value of the transaction but deals like this often come at a premium to the market price to arrive at fair value for both parties. Shares in Eterna closed trade in Lagos on Tuesday at N7.79 per share.

Lenux Integrated Resources Limited, Global Energy & Raw Materials Limited, Meristem Wealth Management Limited, Radix Capital Partners Limited, GASL Nominee Limited, GTI Capital Limited and Cardinalstone Partners Limited sold their cumulative 60.98 per cent stake to Preline, an Eterna note posted by the Nigerian Exchange (NGX) on Tuesday showed.

The transaction has gained nods from watchdogs including the Securities and Exchange Commission, the NGX and Federal Competition and Consumer Protection Commission.

The energy sector’s merger and acquisition market has been passably active this year, with Ardova buying out Enyo in June as it scaled up arrangement to transition from fossil fuels to cleaner energy.

Eterna, which more than doubled its profit to N416 million for the nine-month period ended September, has announced an ambition to grow post-tax profit to N582.9 million at full year.

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