The Zinox Group, Sub-Saharan Africa’s top tech conglomerate, has been linked to a prospective takeover of pan-African e-commerce firm Jumia Technologies, which has seen its stock soar 14.81 per cent.
Jumia’s shares are currently trading at $5.89 on the New York Stock Exchange (NYSE) after spiking by 14.8 per cent on Friday, May 13, 2022, according to investigations.
After a succession of trending media stories stated that the chairman of Zinox Group, Leo Stan Ekeh, may be seriously considering an acquisition of Jumia after quietly ramping up shares in the company, investors boosted their buying interest in the company.
Even though Zinox has yet to confirm or deny Mr Ekeh’s interest in Jumia, the news has helped to boost the stock’s valuation, which surged 14.8 per cent on Friday, starting at $5.13 per share and ending at $5.89 per share.
As a result of the double-digit per cent gain in its shares, the e-commerce company’s market capitalisation surpassed $588 million. Despite the current increase in its stock price, Jumia shares have fallen by more than 50% since the beginning of 2022.
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Investors are leaving IT firms with high prices and earnings multiples in favour of more fundamentally sound companies in the oil and gas and industrial sectors, according to experts.
Jumia also recorded $227 million in losses after taxes in its 2021 annual income statement, with only $413 million in net equity.
Although still speculative, a Zinox Group buyout of Jumia would make the digital behemoth the continent’s largest e-commerce company and would follow in the footsteps of a similar breakthrough acquisition it made with Konga in 2018.
Konga was purchased by Ekeh from its previous owners, Naspers of South Africa and AB Kinnevik of Sweden, while the company was on the point of exiting the market. Konga, now under new management, became the first African e-commerce company to achieve profitability three years later. Ekeh is also said to be backing a large increase in vital investment in Konga in sectors including technology, logistics, and massive regional warehouses in cities such as Lagos, Port Harcourt, Abuja, and Onitsha.
Konga, which has earned a name for itself through its groundbreaking combination of online and offline commerce, has continued to pique the interest of a slew of possible investors, despite rumours of an African expansion.
