In a significant strategic shift, Savannah Energy Plc has moved to cancel a major share repurchase plan and is set to formalise a new pact with its largest shareholder, NIPCO Plc. This comes as the Nigerian energy conglomerate seeks to substantially increase its investment in the British independent energy company focused on Nigeria.
Strategic Shift: From Buyback to Stake Expansion
The company announced it will terminate the off-market share buyback program that was initially unveiled on October 22, 2025, and subsequently approved by shareholders on November 28, 2025. This decision, taken after external professional advice, will preserve approximately £10.05 million in cash that was earmarked for the repurchase.
Concurrently, NIPCO Plc revealed its intention to acquire a large block of shares that were originally part of this buyback agreement. Specifically, NIPCO is expected to purchase 118,083,927 out of the 143,565,582 ordinary shares covered by the terminated plan.
NIPCO's Ambitious Acquisition Plan
This initial acquisition is set to raise NIPCO's ownership to about 25 per cent of Savannah Energy's current issued share capital. However, NIPCO's ambitions extend further. The company has signalled its plan to acquire up to an additional 1.5 per cent of Savannah's shares through more purchases on the secondary market from identified shareholders.
If this full plan is executed, NIPCO's total holding would climb to approximately 26.5 per cent. Savannah Energy has cautiously noted that there is no certainty these extra acquisitions will be completed.
Governance and the New Relationship Agreement
Central to this corporate manoeuvre is a proposed relationship agreement designed to safeguard Savannah Energy and its minority investors. The agreement aims to ensure the company continues to operate independently despite NIPCO's enlarged stake.
Key provisions of the pact include:
- NIPCO will support board-recommended governance resolutions.
- NIPCO will have no automatic right to board representation.
- NIPCO must refrain from any hostile takeover attempts, subject to certain exceptions.
- NIPCO must comply with orderly market rules for any future share sales.
This agreement is anticipated to take effect shortly after regulatory consultations, with NIPCO expected to agree to any necessary amendments. It will remain in force as long as NIPCO and its affiliates collectively hold at least 12.5 per cent of Savannah's shares.
Implications and Financial Flexibility
Savannah's board stated that the strategic value of securing the relationship agreement was a primary driver for ending the buyback. The preserved capital of roughly £10.05 million enhances the company's financial flexibility.
Importantly, the company retains the authority to return capital to shareholders through board-approved on-market buybacks, a power that was authorised at the same general meeting on November 28, 2025. This move allows NIPCO to expand its footprint in the gas sector's midstream operations while providing a structured framework for its growing influence within Savannah Energy.
