Transcorp Corporation plc has announced that its shareholder, HH Capital Limited, has received SEC approval to tender up to 2,032,399 shares of Transcorp from existing shareholders, which accounts for 0.02% of the total shares.

This announcement comes after HH Capital successfully acquired 1,493,477,786 ordinary shares of Transcorp at an average price of N3.12 per share.

As a result, HH Capital’s total direct and indirect shareholdings have increased to a point that requires them to make a mandatory tender offer under the Investment and Securities Act of 2007 and SEC regulations.

Transcorp currently has a total of 40.6 billion shares with about 1,586 shareholders holding a combined 89.49% of the shares of the company. However a recent share reconstruction reduced the total outstanding shares to 10.2 billion shares outstanding.

A mandatory tender offer which requires an acquirer to publicly offer to buy shares from other shareholders when their ownership reaches a certain threshold, ensures fair exit opportunities for minority investors.

In a recent update, Transcorp confirmed through its company secretary, Atinuke Kolade, that the SEC has approved HH Capital’s offer to acquire approximately 0.02% (2,032,399 shares) of its fully paid ordinary shares at a 0.25% premium.

This means that shareholders who decide to sell their shares, or “tender” them, will receive a slightly higher price than the trading value at the time of the offer.

The buying price will be based on the opening price of Transcorp’s ordinary shares on the day the offer is made for each unit tendered.

Backstory

On April 28, 2023, HH Capital Limited acquired 1,493,477,786 ordinary shares of Transnational Corporation Plc (Transcorp) at an average price of N3.12 per share.

• This purchase raised HH Capital’s ownership stake to 35.94% of Transcorp’s total shares, factoring in the holdings of related parties, including Tony O. Elumelu and Dr. (Mrs.) Awele Vivien Elumelu.
• In total they held a combined
• Due to this acquisition, HH Capital is required to make a mandatory tender offer to other shareholders, as stipulated by the Investment and Securities Act of 2007 and relevant regulations from the Securities and Exchange Commission.
• This obligation aligns with standard regulatory practices rather than a business strategy.

Performance

Transcorp Plc recently released its unaudited financial results for the third quarter of 2024, offering an overview of the company’s performance during this period.

• The company reported a 352% year-on-year increase in profit before tax (PBT), totaling N34.5 billion for the quarter.
• This brought the nine-month PBT to N105.4 billion, which marks a 303% increase compared to the same period last year and is 79% higher than the full-year 2023 pre-tax profit.

In terms of revenue, Transcorp recorded a 166% increase in Q3 2024, reaching N122.327 billion, up from N45.903 billion in Q3 2023.

For the nine-month period, total revenue rose to N297.664 billion, reflecting a 133% year-on-year growth.

• The energy segment accounted for 57.6% of the nine-month revenue, while capacity charges and room sales made up 26.1% and 10.7%, respectively.

On the Nigerian stock market, Transcorp’s shares have surged over 400% year-to-date. The stock began the year at N8.66 and has since soared to N44.00.

However, the the company had a share reconstruction which reduced the outstanding shares by 1 for 4. Thus the actual appreciation has been up by 27%.