Oando Plc
*Analysts bullish on offer
Shareholders have hailed the extension of Oando Plc N54.6 billion rights issue to February 20, saying it would afford them the opportunity to exercise their rights.
The Security and Exchange Commission (SEC) last week approved the extension of the rights issue due to the industrial action by pensioners of the Nigerian Postal Service in January 2013, which resulted in the disruption of distribution of rights circulars to majority of Oando’s shareholders.
The President, Association for the Advancement of the Rights of Nigerian Shareholders (AARNS), Dr. Faruk Umar, said the extension showed that the regulators, board and management of Oando had the interest of shareholders at heart.
“This is a good development and we shareholders are very pleased with it because it would enable us exercise our rights. This is an opportunity no shareholder would want to miss as the offer price of N12 per share is so attractive given the future prospects in the integrated energy group,” Umar said.
Meanwhile, leading market analysts are projecting a bullish run for Oando shares and a bountiful return on investment for its shareholders.
Meristem Securities Limited have projected that the price of the equity would hit N22.14 within the year. Meristem Securities is not only betting on a N22.14 Oando share price target, but have also placed a ‘buy’ recommendation on the stock, which they expect to go bullish in the course of the year.
Similarly, analysts at FSDH Securities Limited have projected a price of N19.12 for Oando shares. “Applying a relative valuation method to derive the value of ordinary shares of Oando, we arrived at a fair value of N19.12 per share. The current market value of Oando share is about N14 while the rights issue price is N12.00. This means that the rights were offered to shareholders at a discount to the market price while the market price is also trading at a discount to our fair value. On the basis of this, we recommend that existing shareholders take up their rights” they said.
Another analyst said the rights issue price of N12.00, Oando is valued at a steep discount to Emerging Market Integrated Energy (EMIE) peers, considering a range of valuation metrics.