Zinox on Jumia acquisition: It may happen in the future, but no concrete plans yet
Leo Stan Ekeh

By AYOOLA OLAOLUWA

Billionaire businessman and Zinox Group chief, Leo Stan Ekeh, has launched an audacious takeover bid for Africa’s leading e-commerce firm, Jumia, multiple sources with knowledge of the bid informed Business Hallmark.

The move comes after Ekeh first bought YesMobile, a high-value retail outfit, and most recently ,Konga, another leading e-commerce and Jumia’s biggest competitor.

Ekeh is not new to the ecommerce business. He is reputed to have founded the first ecommerce in Africa with his now-defunct Buy Right Africa in 2010.

Jumia, built around a market place, Jumia Logistics, and JumiaPay, it would be recalled, was established in 2012 by its founders who leveraged on technology to deliver affordable online services to consumers, as well as empowering businesses to grow by using its platform to reach and serve consumers across the continent.

The e-commerce firm is currently active in 14 African countries with around 100,000 active sellers transacting online with millions of consumers.

However, the company has been struggling ince its much celebrated listing on the New York Stock Exchange (NYSE)on April 12,2009.
The company’s fortune worsened recently after panicked investors began to sell off their automobile, IT and bitcoins stocks in the US and Europe owing to negative sentiments in the global capital market. The negative sentiment is brought about by the ongoing war in Ukraine, which has forced many companies, particularly tech and automobile firms, to shut down production.

The already embattled Jumia, meanwhile, is not immune to the shock. The firm which opened trading on NYSE with an offering price of $14.5, with further appreciation to $65 pershare by April 2021, had seen its stock crashed to $4.78 pershare on Wednesday,May11,2022, before appeciating to$5.25 per share on Friday, May 13, 2022 after the news of the take over bid hit the air waves.

Encouraged by the low price of the stocks, the Nigerian billionaire has been mopping up the shares of Jumia in a bid to acquire controlling shares in the strugling e-commerce firm, multiple sources in the know informed BH.

“Ekeh has been gradually scooping up the shares of his biggest competitor, while leveraging on the continued fall of its share price.

“He is using the same take over strategy he used to successfully acquired Yes Mobile and Konga.

“Many investors have already sold their shares to him, while many more are still approaching him to help relieve them of the shares.

“He (Stan Ekeh) was initially scooping up available shares at a premium, paying between $1 and $2 per share above the market value to entice investors to sell.

“But the situation has changed as the pressure to sell has pushed down the value of the stocks.

Leo Stan Ekeh moves to buy Jumia for $200m
Jumia logo on NYSE

“Shareholders are particularly attracted to selling a portion of their stocks to Ekeh after seeing how he rescued a practically dying Konga from going under.

“The belief in the industry is that if there is anyone that could save Jumia, he (Stan Ekeh) is the one.

“And barringa last minute hitch, the Zinox chairman will soon be announced as the new owner of Jumia”, disclosed an industry source privy to the whole arrangement.

Jumia has continued to report loses, despite being the largest ecommerce platform in Africa. For instance, the company reported a loss of $227 million in 2021.

Owing to the loses, BH reliably gathered that Jumia’s majority stakeholders are contemplating selling the company to Zinox Groupor another competitor, Takealot.com.
However, many of them are said to be favouring Ekek as he is the one most likely to give them fair value for their stocks.

BH investigations revealed that Jumia’s core investors are not new to making divestment decisions. The investors, it was learnt, sold the firm’s hotel and flight services arm, Jumia Travel to Travel start in December 2019.
According to available data, Konga, a subsidiary of ZinoxGroup, is the third largest ecommerce company in Sub Saharan Africa.

On the verge going bankrupt, Ekeh had acquired the company in 2018. Ekeh, through his Zinox behemoth, immediately pumped in N4billion to upgrade its technology and logistics capabilities.

Not yet done, Konga embarked on a buying spree by acquiring warehouses all over the country in an attempt to meet clients demands.
Expectedly, Konga quickly transformed from a dying entity into a prospering firm. In the spate of 12 months, the firm recorded substantial drop in operation costs and adopted a drastic change in its business strategy.

In less than 3 years of acquiring Konga, Ekeh drastically changed its fortunes. In 2021, the ecommerce giant became the first e-commerce brand to declare profits, a feat industry expert described as the ‘8th wonder of the world’.

When approached for comments on the development, the Head of Corporate Communications at ZinoxGroup, Gideon Ayogu, neither confirmed nor denied the speculation.
“Nothing is impossible”, Ayogu replied in a very short message.

Experts who spoke on the development said the acquisition will make Zinox the largest e-commerce firm in Africa.

Meanwhile, Forbes, a globally renowned media company, focusing on business, investing, technology, entrepreneurship, leadership, and lifestyle, has predicted that Konga will dominate the African e-commerce field.

The magazine, while making this known in a special feature published in its recently released Africa edition, commended the remarkable growth trajectory that has seen the e-commerce giant become the first African e-commerce player to declare profit.

Forbes also listed the various thriving subsidiaries that have transformed the Konga Group into a formidable, e-commerce behemoth, while also highlighting the pivotal role of KongaPay, a Central Bank of Nigeria (CBN)-licensed fintech platform as a leader in the Nigerian e-wallet space.

Konga, Forbes projected, will attract over a $2billion valuation when it eventually go public.
‘‘While the brand eyes its listing on the stock market to fulfil its potential in the marketplace, there are reports that it boasts over $2 billion valuation, thanks to its new acquisition by Zinox.

‘‘Konga has continued to show promise in the online marketplace. After its acquisition, a review of the company’s performance shows the brand experienced over 800% growth.

“This surpasses expectations in e-commerce sectors across the continent. The new phase of Konga, driven by young, ambitious and innovative individuals, has seen it rake over $3oom in investments, according to reports.’

‘‘Efficient management of these investments has driven the brand to succeed in the e-commerce space, placing the brand on a profitable footing. The transformation has seen the brand recording significant progress in its online and offline transactions.

“Data shows that Konga fulfilled to the last mile 85% of all orders placed on its online and offline platform. The brand has also navigated and found a lasting solution to issues with logistics, one of the great hindering factors with e-commerce in Africa,’’ the magazine stated..

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