May 14, 2024
…. They Need Little Money To Buy It, Says Market Operators
By Kelechukwu Mgboji InvestAdvocate
Lagos (INVESTADVOCATE)-
Core investors with keen interest in mass media industry may soon acquire controlling stake in Daar Communications Plc, InvestAdvocate has learnt.
Our correspondent has it on good authority that the ground work preparatory for a “hostile acquisition” of the struggling company has commenced.
A senior dealing member of the Nigerian Exchange (NGX) privy to the planned acquisition told InvestAdvocate that the investor will need little amount of money to buy the company given its very low valuation.
As at Monday, May 13, the stock traded at 67kobo per share, about 49 percent of its book value.
Bogged down with about N11 billion liabilities out of which N4.1 billion is salaries and allowances owed to its staff and N2.8 billion to its suppliers, the parent company of Africa International Television (AIT), posted a loss of N1.6 billion for the year ended December 31, 2023.
With a market capitalisation of about N8.28billion, DAAR Communications is among the least valued company on NGX in terms of price value and very low liquidity.
Based on its latest audited accounts, DAAR Investment & Holdings Co Ltd holds 61.13 percent stake of the company. Despite these grave statistics emanating from the company’s financials, the Managing Director and Chief Executive Officer of APT Securities and Funds Limited, Mallam Kofi Garba said the planned acquisition of the company is a very profitable venture.
“I would have loved to contact Alhaji Atiku Abubakar to buy the company. I will make a proposal to him. You need little money to buy this company,” the investment expert told our correspondent in Lagos.
When asked if the deal is a profitable venture in view of the fact the company has been unprofitable since it was listed on the NGX, he reaffirmed it is quite profitable.
Hear him: “Acquisition of Daar is a profitable venture. Don’t forget, they have television, radio, and they are beyond Lagos. They are in so many states of the country. That means if you acquire it, all you have to do is to modify the operations and move on.”
He added “Once you acquire a substantial holding, they (referring to current owners) will dance to your tone. Either Daar will come and beg you to sell back to them which must be on profit or you hold on to your stake. Somebody will come begging you someday saying I am interested in this company,” the senior stockbroker explained.
At the time of filing this report, InvestAdvocate could not unravel the details of the investors eyeing the mass media company, but grapevine sources disclosed that some politicians from Southern part of the country are positioning for it ahead of Nigeria’s general elections in 2027.
Lately, there had been some significant trading activities on the company’s shares driving the share price up to 69kobo up from about 30kobo.
There are indications that the prospective investors may embark on buying spree to mop up shares of the losses-spinning company dumped on NGX trading floor.
If this happens, equity analysts expect the share price of the company presently trading below N1.00 to firm up above N5.00 per share.
“I see a repeat of equities invasion of Transcorp Plc happening to Daar Communications, and that will be very interesting. There’s a limit to every gimmick,” says Mr. Evans Asagwara, an equities investment expert with decades of experience.
Recall that the price of Transcorp Plc rose sharply above N10.00 from N2.00 after Femi Otedola moved in to acquire controlling stake in the company, displacing the Chairman, Tony Elumelu, from his preeminent position.
It cost Elumelu about N32billion to buy out Otedola and recover the company to himself.
Like Daar Communications, Transcorp was believed to be profitless company with the share price stagnating between N1.00 and N2.00 for more than ten years until Otedola moved to buy controlling stake.
