Nov 30 (Lagos) - Mobil Oil Nigeria Plc ( MOBIL
) yesterday said Nipco Plc will pay US$ 301m (about N91.8bn) for the acquisition of the 60% shares of ExxonMobil Nigeria Downstream.
Nipco, an indigenous Nigerian downstream oil and gas company, had executed a Sales and Purchase Agreement with ExxonMobil on Monday 17th October, 2016 for the acquisition of the 216,357,157 shares but the financial consideration was not disclosed.
So if you divide N 91.8 billion with 216 million units of MOBIL
shares you get a price of N 424 per unit.
Now that price is about 60% higher than todays closing price of MOBIL
shares of N 266.67 and that is after the 10% gain today and 10% gain of yesterday in the stock price.
So basically these stocks are going to remain hot until they breach the 424 levels going by the above calculation.
When that deal happened, we know it was a buy and immediately upgraded the stock. Some people queried our decision but this clears everything up. The stock is a buy at current levels, unless it is not.
But if the smart guys at NIPCO are ready to pay that price per unit that means there is value. NIPCO growth story is nothing short of phenomenal since it was founded in Nigeria.
But even if you want to buy the stock its a bit late now because only less than 33000 units were traded today and the bid was more than a million units.
Maybe tomorrow buyers will get another chance. No one knows in the stock market but if that calculation above is true than this stock is headed upwards.
reporting for easykobo.com on Wednesday, Nov 30 2016 from Lagos, Nigeria
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