Cadbury Nigeria Plc, a manufacturer of drinks and food products, rose to the highest in five years after announcing plans to take full ownership of its Stanmark Cocoa Processing Co. unit.
Cadbury shares climbed 5 percent to 38.87 naira at the close in Lagos, the commercial capital, the highest level since Feb. 15, 2008. About 730,500 shares changed hands, 102 percent of the three-month daily average, according to data compiled by Bloomberg.
Cadbury proposes to merge the companies to reduce the cost of running Stanmark as a unit and bolster revenue, Kufre Ekanem, a spokesman for Cadbury Nigeria, said Feb. 6. Stanmark has a 12,500-ton capacity plant that produces cocoa butter, liquor and powder. It supplies the entire cocoa powder requirements for Cadbury beverage products while the cocoa butter and liquor are exported, Ekanem said.
“A 100 percent takeover of Stanmark will entail Cadbury exercising direct control over its sources of raw materials, which investors think will be better managed to enhance beverage production, even increase cocoa exports.” Raheem Mohammed, chief executive officer of Kundila Finance Ltd., said in a telephone interview from Lagos.
Cadbury Nigeria’s net income for the nine months through September advanced 34 percent to 2.08 billion naira ($13.2 million) from 1.56 billion naira a year earlier, it said in a statement on Oct. 31. Revenue declined 2.4 percent to 24.1 billion naira.
The stock has climbed 34 percent this year, compared with a 18 percent gain for the Nigerian Stock Exchange All-Share Index.
Nigeria is the fourth-largest cocoa producer after Ivory Coast, Ghana and Indonesia, according to the London-based International Cocoa Organization’s website.