Core investor acquires 43% of Omoluabi Mortgage Bank
A new core investor has acquired 43.93 per cent equity stake in Omoluabi Mortgage Bank (OMB) Plc in a divestment deal valued at N1.2 billion.
The transaction, which was done through a block divestment, was consummated through the Nigerian Stock Exchange (NSE).
The divestment saw the transfer of about 2.2 billion ordinary shares of 50 ko0bo each, representing 43.93 per cent equity stake, to the new core investor.
The transaction was crossed at 55 kobo per share. The divested shares were previously held by Morgan Capital Securities Limited.
The divestment was consummated as an off-market transaction through the negotiated cross deal window at the Exchange.
As an off-market, negotiated cross deal, it means that the deal was 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.
Omoluabi Mortgage Bank has the third lowest free float at the Nigerian stock market, implying that it is one of the stocks with the highest concentration of shareholdings in the hands of few directors and core investors.
With a free float of 1.96 per cent, it means that 98.04 per cent of the mortgage bank’s shares are held by core investors and directors.
Companies on the main board of the NSE, where Omoluabi Mortgage Bank is listed, are expected to maintain a free float of 20 per cent, implying that the mortgage bank has a free float deficiency of 18.04 per cent.
Free float, otherwise known as public float, refers to the number of shares of a quoted company held by ordinary shareholders other than those directly or indirectly held by its parent, subsidiary or associate companies or any subsidiaries or associates of its parent company; its directors who are holding office as directors of the entity and their close family members and any single individual or institutional shareholder holding a statutorily significant stake, which is 5.0 per cent and above in Nigeria.