CBZ gets extension to finalise mandatory offer for First Mutual
CBZ Holdings has been given an extension until November 30 to proceed with a mandatory offer to the remaining shareholders of First Mutual Holdings Limited (FMHL), as the Competition and Tariff Commission (CTC) finalises its assessment of the transaction.
The Zimbabwe Stock Exchange (ZSE) granted the extension, following CBZHL’s request. The company is unable to make the Mandatory Offer until receiving approval from the CTC, under regulations from the ZSE.
In a notice, CBZ group chief governance officer, Rumbidzayi Angeline Jakanani, said: “At this stage the CTC has communicated to the ZSE that it expects that its board would have made the final decision on the transaction in terms of the Competition Act (Chapter 14:28) by end of November 2024.
“The ZSE has, therefore, granted CBZHL a further dispensation up to 30 November 2024 within which a mandatory offer must be made to the remaining shareholders of FMHL.”
Post the transaction, FMHL will delist from the ZSE. CBZ Holdings Limited is a ZSE-listed financial services company with subsidiaries in banking, insurance broking, short-term insurance, life assurance, microfinance, property development, maintenance, and management.
FMHL is also an integrated financial services entity with subsidiaries in short-term insurance, life insurance, reinsurance, medical aid, and healthcare services as well as property development, maintenance, and management.
Recently, CTC said it was investigating the proposed acquisition of an additional stake in FMHL by CBZ Holdings Limited. CBZ Holdings controls over 31 percent shareholding in First Mutual Holdings.
Reads part of CTC notice: “Notification of the proposed transaction was done in compliance with one of the commission’s conditions set out in the order approving the acquisition of 31,22 percent shareholding by CBZ Holdings Limited in First Mutual Holdings Limited in 2022.
“The merger was approved on conditions that CBZ Holdings Limited shall notify the commission of any intention to increase its stake in First Mutual Holdings Limited,” it said.
The commission intended to determine whether the proposed acquisition will likely substantially lessen the degree of competition in Zimbabwe or is likely to result in a monopoly which will be contrary to the public interest as provided in Section 32(4) of the Act.
CBZ says the transaction was designed to create a pan-African bank starting with the merger with FMHL. CBZ acquired 31,22 percent of FMHL from Nssa and according to the terms of the contract, the consideration being a blend of cash and a share swap under a 30/70 ratio.
The rationale behind the share swap was to leverage CBZ’s strong share price on the ZSE and use it as currency for this transaction.
The bank’s management believes the transaction will unlock further value for existing shareholders and allow more wealth creation.
CBZ also has the desire to become a regional player and the acquisition of FMHL is a key part of this process as the group has successfully established itself in other jurisdictions within SADC and the goal of this merger is to maximise shareholder value.
The bank also sees the merger as a way to gather the best financial talents in the country under one roof and use them to build and develop Zimbabwe as well as make the country a regional financial hub.-chroncile
