NIPCO To Raise Savannah Stake To 26.5% As Buyback Ends

Savannah Energy Plc has announced plans to terminate its previously approved off-market share buyback agreement, paving the way for its largest shareholder, NIPCO Plc, to increase its stake in the company to approximately 26.5 per cent.

Under the proposed arrangements, NIPCO intends to acquire 118,083,927 of the 143,565,582 ordinary shares that were originally part of the buyback agreement, raising its holding to around 25 per cent of Savannah’s current issued share capital.

According to a statement obtained by THE WHISTLER, the Nigerian energy conglomerate has also indicated its intention to acquire up to an additional 1.5 per cent through secondary market transactions with existing shareholders.

The termination of the buyback agreement, which would have cost Savannah approximately £10.05m, will preserve the company’s cash resources, enhancing financial flexibility while allowing for potential future on-market share buybacks approved by shareholders.

In connection with NIPCO’s increased investment, Savannah is entering into a Relationship Agreement intended to provide protections for minority shareholders and ensure the company maintains operational and decision-making independence.

The agreement will include undertakings by NIPCO to support board-recommended governance resolutions, confirm it has no board representation, and restrict any hostile takeover attempts. It will also establish orderly market disposal obligations for NIPCO’s future share sales.

Savannah’s CEO, Andrew Knott, will acquire the remaining 25,481,655 shares from the terminated buyback through his investment vehicle, raising his total stake to 292,764,370 shares, or approximately 13.8 per cent of the company.

The move is seen by the board as a demonstration of senior management’s confidence in the company’s strategy and prospects.
Independent directors, after consulting Savannah’s nominated adviser, Strand Hanson Limited, have concluded that the terms of the buyback termination and the Relationship Agreement are fair and reasonable to shareholders.

Entry into the agreement is expected to occur shortly following regulatory consultations.