FINANCIAL services firm CBZ Holdings Limited (CBZHL) is almost ready to publish its mandatory offer for the remaining shares in its recently acquired entity, First Mutual Holdings Limited (FMHL).
According to the Zimbabwe Stock Exchange (ZSE) rules, a shareholder is required to make an offer to other shareholders in a listed firm when they acquire at least a 35% stake in the company.
CBZHL’s mandatory offer is in accordance with the ZSE listing requirements and the Companies and Other Business Entities Act [Chapter 24:31].“FMHL shareholders are advised that CBZHL is preparing to publish a detailed circular with specific details of the mandatory offer. This exercise is underway and due process is being followed,” FMHL said.
“As this may have a material effect on the price of the company’s securities, shareholders are advised to exercise caution when dealing in the company’s securities pending publication of the CBZHL offer to FMHL minorities.”
After CBZHL purchased FMHL shares that took its shareholding to 36,35% in September 2023, the former was required to make a mandatory offer for the remaining shares.The value for the remaining shares, using the current listed price of FMHL shares, is ZWL$500,05 billion, translating to nearly US$55 million in real terms.
“On 26 October 2021, CBZ Holdings Limited signed a share purchase agreement with the National Social Security Authority (Nssa) to acquire 226 997 219 First Mutual Holdings Limited shares that were then held by Nssa,” FMHL said in a statement released on Monday.
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“In an announcement dated 10 October 2023 by CBZHL to FMHL shareholders, FMHL shareholders were advised that the above-mentioned acquisition had become unconditional and had been completed.”
The mandatory offer comes as CBZHL is seeking to strengthen its balance sheet to attract new capital into the business.This initiative was pushed by CBZHL former chief executive officer Blessing Mudavanhu, who made a shock resignation together with the then group chairperson Marc Holtzman, from the financial services firm in December 2023.
Mudavanhu was replaced by then CBZ Bank managing director Lawrence Nyazema as the group chief executive officer in an acting capacity, while Luxon Zembe assumed the position of acting chairperson also in a similar role.
The sudden departures rattled the market considering that CBZHL is the largest financial services firm by market capitalisation on the local market.At the time of the departures, CBZHL was in the process of buying a controlling stake in ZB Financial Holdings Limited.
As of September 15, 2023, CBZHL’s balance sheet was valued at ZWL$6,51 trillion, translating to US$1,34 billion.