The Nigerian Stock Exchange (NSE) at the weekend placed Law Union and Rock Insurance Plc on full suspension, with effect from Friday, October 16.

The full suspension implies a total cessation of trading activities on the shares of the company.

In other words, there will be no trading, including buying and selling, in the shares of the company and it will also not witness any price change.

The Exchange explained that the suspension was necessary to prevent trading in the shares of the company beyond the effective date of the acquisition of the company.

The effective date is the day the Certified True Copy (CTC) of the court sanction of the scheme of arrangement for Kanuri LUR Limited to acquire the entire issued and fully paid ordinary shares of 50 kobo each in Law Union held by the scheme shareholders was registered with the Corporate Affairs Commission (CAC).

The Exchange noted that the scheme of arrangement for the acquisition will result in the delisting of Law Union from its Daily Official List.

The NSE had earlier approved application by Law Union & Rock Insurance seeking voluntary delisting of its shares from the main board of the Exchange.

The voluntary delisting was part of ongoing acquisition of Law Union by Anglophone West Africa private equity firm, Verod Capital Management.

Verod had offered N5.3 billion for the acquisition of the entire share capital of Law Union in a major bid that further opened up mergers and acquisitions in the  insurance industry.

The board of Law Union had confirmed that it received a binding offer from Verod Capital seeking to acquire the 4.296 billion ordinary shares of 50 kobo each of Law Union at N1.23 per share. The offer thus valued Law Union at N5.28 billion.

The offer price of N1.23 per share represented a premium of 208 per cent on the 60-day volume weighted average share price and 140 per cent on Law Union’s closing share price on February 26, 2020.

Verod Capital focuses on investing equity and equity-linked capital in growth companies across various consumer-driven sectors in Nigeria, especially the insurance sector.

Insurance companies are in a hot race to raise new equity capital to meet new minimum capital requirements for various insurance functions as directed by NAICOM. NAICOM had in May 2019 released new capital requirements for insurance businesses with a 13-month compliance period for operators to shore up their minimum capital base to the required level.

The minimum paid-up share capital of a life insurance company was increased from N2 billion to N8 billion, non-life insurance from N3 billion to N10 billion, composite insurance from N5 billion to N18 billion while re-insurance companies were directed to raise their capital base from N10 billion to N20 billion.


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