By Ogbuotobo Chuks

After watering the appetite of expectant investors, the much awaited public offer of Dangote Flour may be cancelled. Instead, the company is contemplating a private placement as a means to raising the required funds.

The Dangote Group is said to have encountered some disagreement with the regulatory authorities over the offer price. The regulatory body of the stock exchange is insisting on the offer price to be pegged lower than the intended N15. Based on this fallout, the Dangote group, which believes that the price is justified based on the fundamentals and future prospects of the company are seriously considering a private placement.

This is due to the fact that the price in the private placement cannot be influenced by the regulatory authorities. If the private placement holds at the end of the day, many investors would be denied the opportunity to invest in the company at the early stage, which many see at the best. As we all know, private placement offers have some strings attached, like a minimum sum that must be invested, and this usually runs into millions on naira.

This entry was posted on Monday, August 27th, 2007 at 5:07 pm and is filed under StockMarketNigeria. You can follow any responses to this entry through the RSS 2.0 feed. Tags: Dangote Group
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