Minority Shareholders Support UBA’s N239bn Rights Issue

Some members of the minority investor community in Nigeria have vowed to take up their rights in the ongoing N239.4bn rights issue of United Bank for Africa Plc (UBA).

UBA opened acceptance for the N239.4bn rights issue, offering 6.84 billion ordinary shares of 50 kobo each to existing shareholders at N35 per share on November 15.

The rights issue is pre-allotted based on one new ordinary share of 50 kobo each to every five ordinary shares held as of November 05, 2024. The rights issue is scheduled to close on December 24, 2024.

Some shareholder groups revealed that they would be encouraging their members to take up their rights and even more.

In separate chats, members of the minority investment community said that UBA has a long history as an institution that places shareholders’ interests foremost in its decision-making.

They cited the bank’s outstanding performance in creating value for shareholders through capital gains and dividends.

Founder of the Independent Shareholders Association of Nigeria, Sunny Nwosu, in his comments, said UBA’s longstanding history of positive disposition to shareholders has endeared the group to the investing public.

“The bank is doing well, and so are its subsidiaries. From whatever angle you look at it, UBA is a good buy. And I’m talking as a long-time shareholder. It is one bank that prioritises shareholders’ happiness.

“Go down the lane and check the bank’s dividend history and critical decisions when it comes to shareholders’ issues. It’s a bank one can rest on, so I’m advising other shareholders to pick up their rights; it’s an opportunity. We are picking up ours and even asking for more,” Nwosu said.

A shareholders’ activist and leader, Mr Adeleke Adebayo, said UBA’s rights issue is good and well-structured with potential for less dilution and stronger earnings potential.

He said he would pick up his rights given the positive outlook for the bank.

“My advice to other shareholders is to try and pick up their rights. UBA has made phenomenal progress over the years. Its growth and expansion are legendary. It has witnessed very stable leadership and given consistent value to shareholders,” Adebayo said.

President of the Association for the Advancement of Rights of Nigerian Shareholders, Dr Faruk Umar, said the decision to undertake a rights issue to existing shareholders underscores continuing trust between the bank and its shareholders.

Citing the performance of the bank in the past three quarters and its record-setting interim dividend of N2 per share, Umar described UBA as a “solid bank” with a lot more to offer the shareholders in the future.

“I strongly advise shareholders to pick up their rights, as I am very hopeful the price will go up after the rights offer is concluded. All members of our association are going to buy their rights, as we strongly believe in the quality of the board, management, and staff of the bank.

“All the UBA-related companies including Transcorp Hotels, United Capital, Transcorp Energy, African Prudential, and Transcorp Plc are doing so well, and their performance attests to the valuable leadership we are getting from Mr. Tony Elumelu and his team,” Umar said.

National Coordinator, Pragmatic Shareholders Association of Nigeria, Mrs Bisi Bakare, commended the decision of the bank to launch its offer at this time, saying, “I believe the UBA’s rights issue is going to be successful considering the antecedents of the group for all its years in the capital market.

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‘For two decades, there’s no financial year UBA didn’t pay dividends to its shareholders. Investors have benefited in terms of capital appreciation too. You know that UBA recently declared a N2 interim dividend for the half-year result.

“I will advise shareholders to take up their rights. This is a great opportunity for shareholders of UBA. Over the years, UBA has been very friendly to its investors. The only bank that investors benefitted from its subsidiaries, which made us, UBA shareholders, also shareholders in United Capital Plc, Afriland Properties Plc and Africa Prudential Plc. Based on all the above, I’m quite sure the offer is going to be successful. We are picking our rights and mobilising for more,” Bakare asserted.