Vivo Energy shares soar on Vitol takeover

Vivo Energy shares jumped some 20% on Thursday as the group confirmed a cash offer from Vitol has been accepted.

Vivo Energy distributes fuel for Shell and Engen across Africa but has had a far from fruitful time since being listed on the London Stock Exchange.

At the time of it’s IPO, Vivo was the largest African company IPO in London for a decade but failed to live up to the hype with shares spending most of the time since below the flotation price.

Their largest shareholder Vitol has quite clearly had enough and decided its time to take the business private through BidCo, and company indirectly owned by Vitol.

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 The of price of 139p per Vivo Share represented a 24.6% premium to the 111p closing price 24th November.

“The three and a half-year history of African service station operator Vivo Energy on the London market seems to have come and gone without anyone really noticing,” said Russ Mould, investment director at AJ Bell.

“It is probably in everyone’s best interest that its top shareholder, oil trader Vitol, has emerged with a premium-priced bid.

“While the offer is pitched materially above the current share price, the valuation is substantially below where Vivo was valued when it first listed.

“The Vivo story, running the distribution and marketing of Shell and Engen petroleum products across Africa, just never really gained traction.

“Perhaps it was the focus on Africa which had investors on their guard, as there have been relatively few success stories on the UK stock market to emerge from the continent to date, or maybe Vivo’s patchy profit performance itself was to blame.

“Net income was lower in the first half of this year than it was in the first half of 2018 suggesting that, for all the roll-out of new facilities, the company was struggling to get anywhere fast.”

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