Ellah Lakes public offer falls short as agri-expansion plans move forward

Ellah Lakes Plc, the Lagos-listed agro-industrial group, confirmed its bid to raise up to ₦235 billion through a public offer for subscription did not reach the minimum subscription threshold required to proceed with share allotment, leading to a full refund of investor funds. The offer, which targeted up to 18.8 billion ordinary shares priced at ₦12.50 each, opened in November and closed in December but failed to attract sufficient subscriptions to meet regulatory standards for allotment. As a result, the company said that no new shares will be issued and all monies tendered will be returned to applicants in accordance with the terms of the offer. Ellah Lakes said the outcome does not derail its broader strategic agenda, which includes the planned acquisition of Agro-Allied Resources & Processing Nigeria Limited and ongoing efforts to deepen its role in Nigeria’s agro-industrial value chain.

Leadership at Ellah Lakes characterised the public offer as an ambitious attempt to harness capital markets to fund growth, but investor appetite did not align with those expectations. The public offer was a key component of the company’s strategy to finance the acquisition of ARPN, a move set to expand its operational footprint with substantial plantation assets and processing capacity. Despite the funding shortfall, Ellah Lakes reiterated that the ARPN transaction remains on course and subject to customary regulatory approvals, with closing expected by the end of the first quarter of this year.

The proposed ARPN acquisition, originally announced in October last year, envisages Ellah Lakes taking full ownership of a business platform comprising extensive cultivated and uncultivated land holdings, including oil palm and cassava plantations with processing assets. The deal is positioned as a transformational step that would complement Ellah Lakes’ integrated agribusiness model by boosting scale, diversifying crop mix, and strengthening vertical integration from primary production to value-added processing. Management described the transaction as central to its long-term transformation agenda, aimed at positioning the company as a leading player in West Africa’s agricultural sector.

Ellah Lakes’ strategic pursuit of capital market funding was intended to support multiple fronts of expansion, from broadening crop cultivation and processing operations to upgrading existing palm oil and cassava processing facilities. The company’s integrated model, which combines plantation production with mid-stream and downstream processing, has been highlighted as a differentiator in an industry marked by both high demand and competitive pressure. Government policies promoting agricultural transformation and value-chain development have created opportunities for domestic agribusinesses seeking scale and efficiency, with Ellah Lakes positioning itself to benefit from these structural shifts.

Market analysts noted that the failure to secure sufficient subscription levels may reflect a combination of investor caution, broader market conditions, and scrutiny of corporate fundamentals, including profitability trajectories across the sector. While Ellah Lakes saw an initial uplift in its share price during the subscription period, broader market sentiment appeared to soften as the deadline approached, with shares easing from earlier peaks. These dynamics underscored the challenges of mobilising large equity raises in a market environment where investor confidence is influenced by both macroeconomic factors and company-specific performance indicators.

Ellah Lakes’ management emphasised that the company’s core operational focus remains unchanged despite the outcome of the public offer. Executives reiterated their commitment to enhancing operational performance, improving yields on core plantation assets, and advancing efficiency across the value chain. The pursuit of vertical integration, particularly in high-demand crops such as oil palm and cassava, is expected to support medium- to long-term revenue stability and strengthen the company’s competitiveness within the agribusiness sector.