Dangote Cement hits pause on London share sale of up to $1 billion

What happened

Dangote Cement, majority owned by billionaire Aliko Dangote, has put its London listing plans on hold after a global equity slide cooled demand. The company told the Nigerian exchange on Tuesday that the board will not proceed with the move "in light of current market conditions and the company's strategic priorities."

People familiar with the plan said the company had aimed to raise roughly $1 billion via a secondary offering on the London Stock Exchange, with outreach to investors due to begin on Oct. 27 and a possible launch as soon as November. In mid October, Dangote Cement brought on Goldman Sachs Group Inc. and UBS Group AG as bookrunners.

The market backdrop

The pause comes after a market rout that hit emerging market stocks and as expectations for higher interest rates weighed on appetite for new equity deals. The anticipated transaction was viewed as a potential boost to London's push to attract international listings while the centuries old exchange works to repopulate amid a wave of foreign takeovers.

The bigger picture for Dangote

Dangote Cement describes itself as Africa's largest cement producer and reported sales growth of 36% over the three years to June. In Lagos, the stock has climbed to over twice its value so far this year. Aliko Dangote is also seeking fresh capital across his wider industrial group, with a regional offering linked to his Nigerian refinery operations that may bring in as much as $2.1 billion.

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What it means for your portfolio

In plain English: a tougher tape and higher rate expectations froze a sizable London equity sale, even for a company with strong recent sales growth and a hot stock in Lagos. The owners' plan to sell about 10% is on hold, not gone, and London's listing ambitions remain a subplot to watch. If market conditions thaw, this play could resurface - and the timing will say a lot about risk appetite for emerging market equity.

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