Ardova Petroleum Plc (AP) has announced plans to acquire oil and gas retail outlet Enyo Retail and Supply Limited. This was announced via the website of the Nigerian Stock Exchange on Wednesday, January 13, 2021.
In September 2019 that Ardova had obtained its board approval to acquire downstream assets in the country in line with its expansion plans.
According to the information contained in the press release, Enyo accepted Ardova’s acquisition offer in a deal that is still subject to completion of a due diligence exercise and the receipt of all required regulatory approvals.
Ardova share price rallied during the day as news of the deal reached some investors before it was made public. The share price of Ardova has rocketed this year gaining 47.6% to close at N20 per share as of Wednesday.
This will be the second major acquisition by Ardova Plc after its majority shareholders Prudent Energy Services, using a vehicle Ignite Investments and Commodities Limited, acquired majority shares in Forte Oil Plc from billionaire Femi Otedola in 2019. In the 2019 deal, Mr. Otedola sold 970,166,694 units of Forte Oil Plc in off-market trades at a price of N66.25 per share and valued at about N64 billion. Ardova share price was about N32.3 per share when it was acquired by Prudent Energy Services.
The CEO of Ardova Mr. Olumide Adeosun informed the Exchange that immediately following completion, AP will look to retain the Enyo branded stations which will operate side by side with the AP brand “whilst leveraging the strengths of AP and its group companies” in a move that is typical with such acquisitions.
Enyo was established in 2017 as a downstream energy player and is majorly owned by Folawiyo Energy, a notable player in the oil and gas industry. The Chairman of ENYO is Mr. Tunde Folawiyo. Ardova indirect majority shareholder Prudent Energy Services is owned by a Nigerian businessman and oil mogul Abdulwasiu Sowami.
Ardova reported a profit after tax of N1.8 billion in the first 9 months of the year compared to N2.5 billion the year before. Full-year profit in 2019 was N3.9 billion and it is very likely profits will fall when the company reports its results this year.