Savannah Energy PLC has announced its intention to enter a relationship agreement with its largest shareholder, NIPCO Plc, following NIPCO’s proposal to increase its holding in the British-listed energy company. The move accompanies the termination of an off-market share buyback and is presented by the board as a strategic step that strengthens minority protections and preserves cash for the group.
Under the proposals, NIPCO — a diversified Nigerian energy conglomerate — would acquire 118,083,927 of the 143,565,582 Ordinary Shares originally subject to the buyback. That purchase would lift NIPCO’s stake to approximately 25% of Savannah’s current issued share capital. NIPCO has also indicated an intention to acquire up to a further roughly 1.5% via additional secondary market transactions with identified shareholders, which, if completed in full, would take its holding to around 26.5%.
NIPCO Savannah relationship agreement details
The proposed relationship agreement is designed to provide a number of protections for Savannah and its minority shareholders while allowing the company to continue operating independently. Key expected provisions include undertakings by NIPCO to vote in favour of Board-recommended governance-related shareholder resolutions, a confirmation that NIPCO will not have the right to board representation and an undertaking not to pursue a hostile takeover subject to certain exceptions. The agreement is also expected to set orderly market disposal obligations governing any future disposals of shares by NIPCO, covering both on-market and off-market transactions and giving the company time to identify alternative purchasers where appropriate.
The relationship agreement would remain in force for as long as NIPCO and its affiliates hold 12.5% or more of the company’s issued share capital. Entry into the agreement is expected shortly after regulatory consultation, and NIPCO has indicated it will agree to any amendments that follow that consultation.
As a consequence of these planned acquisitions, Savannah intends to terminate the off-market share buyback announced on 22 October 2025 and approved by shareholders on 28 November 2025. The board, having taken external professional advice, concluded that the relationship agreement offers significant strategic value and that terminating the buyback will preserve approximately £10.05 million of the company’s cash resources. This preservation of cash is expected to enhance financial flexibility while retaining the capacity to return capital to shareholders through Board-approved on-market buybacks.
In a further demonstration of confidence by senior management, Savannah’s Chief Executive Officer Andrew Knott proposes to acquire the remaining 25,481,655 Ordinary Shares that will not be bought by NIPCO. The CEO’s additional purchase, to be undertaken via an investment vehicle wholly owned by him, would increase his total holding to 292,764,370 Ordinary Shares, roughly 13.8% of the company’s current issued share capital.
The arrangements for terminating the buyback and entering into the relationship agreement constitute related party transactions under the AIM Rules for Companies. Savannah’s independent directors — that is, all directors other than Andrew Knott — have consulted with Strand Hanson Limited, the company’s nominated adviser, and consider the terms of the arrangements to be fair and reasonable for shareholders.
Savannah said it expects to publish updates on its website if NIPCO’s holdings change further. The announcement will now proceed through the regulatory consultation process ahead of formal entry into the relationship agreement.
Key Takeaways:
- NIPCO plans to acquire up to 26.5% of Savannah Energy through secondary market purchases, prompting a relationship agreement with protections for minority shareholders.
- The proposed NIPCO Savannah relationship agreement will restrict board representation, bar hostile takeovers in most cases and include orderly disposal obligations.
- Termination of an off-market buyback will preserve about £10.05 million in cash while CEO Andrew Knott increases his stake to roughly 13.8%.
