Flour Mills of Nigeria Plc jumped the most in 19 weeks after saying it will acquire ROM Oil Mills in Ibadan, southwest Nigeria.
The stock gained 4.9 percent, the most since April 23, to 60.62 naira at 12:51 p.m. in Lagos, the highest since May 17.
Flour Mills plans to buy 90 percent equity in ROM Oil Mills Ltd., it said in a statement in the Lagos-based Guardian newspaper today. Shareholders will vote on the acquisition at a meeting on Sept. 12, it said.
“Investors are reacting to the ROM acquisition plan which they believe will provide cheap raw materials for Flour Mill’s food brands,” David Adonri, chief executive officer of Lagos- based Lambeth Trust and Investment Co., said by phone today. “The acquisition is expected to reduce the company’s operating cost and increase profit.”
Profit for the three months through June rose to 3.9 billion naira ($24.6 million) from 2.8 billion naira a year earlier, the Lagos-based company said on Aug. 23. Revenue advanced to 70.7 billion naira from 64 billion naira.
Flour Mills shares have fallen 7.4 percent this year, compared with a 17 percent gain in the Nigerian Stock Exchange All-Share Index (NGSEINDX) over the same period.
To contact the reporter on this story: Emele Onu in Lagos at email@example.com
To contact the editor responsible for this story: Dulue Mbachu at firstname.lastname@example.org