Mercuria Energy Group Holdings SA has acquired 17 per cent stake in Forte Oil Plc ( FO ), valued at $200m (about N39.4bn). Forte Oil said it had through the investment secured additional working capital to continue its “meteoric growth and dominance in the downstream sector, upstream services, power generation and upstream exploration in its bid to becoming Nigeria’s premier integrated energy solutions provider.”
According to a statement by the firm on Tuesday, Mercuria is joining forces with Forte Oil at an auspicious time when equitable funding and expertise is needed to expand and intensify its market penetration to give the company the leverage to further create a positive impact on all shareholders. It said, “This is another step towards projecting Forte Oil Plc as the investment of choice as reflected in our mission statement.
Shares of FO currently trade at N 253.65 per unit on a P/E of 56 with a book value of under N 40 per unit. Some consider the stock to be in bubble territory while some justify the heavy premium on the opportunities available to the Company. According to the current stock price FO is worth N 276.8 billion (56 times P/E) so Mercuria seem to have made a good deal.
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