THERE has been slow up-take of the US60c mandatory offer share price ADC Mauritius made to ABC Holdings minorities when the former increased its stake above the threshold exempt from the compulsory offer regulations.ABC chief financial officer Mr Beki Moyo confirmed on Tuesday that there had been a slow acceptance of the offer although he could not provide specific outcome details.
“Yes, there has been slow uptake, but I do not have the results as yet.”
ADC increased its effective shareholding in ABC from 25,94 percent to a controlling 51,94 percent after underwriting the group’s US$50 million rights offer in 2012 to enable the financial services group to raise more capital.
In terms of the Botswana Stock Exchange rules on mergers and acquisitions, the majority shareholder should make a mandatory offer to buy out minorities once they raise their voting rights shareholding above 34,99 percent.
ADC had obtained a waiver against making a mandatory offer provided it sold shares acquired through the rights offer and if it was prepared not to exercise rights attached to the shares acquired through the cash call.
But ADC decided not to dispose the ABC Holdings shares acquired in terms of the rights issue it underwrote, effectively taking control and giving rise to the compulsory requirement of making a mandatory offer to minorities.
ADC, which has a primary listing on the BSE and a secondary listing on the Zimbabwe Stock Exchange had offered the minority shareholders of ABC BWP5,05 for shares on BSE and US0,60 cents for the stock listed on ZSE.
The pan African banking group holds independent banking licences in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe. In terms of the BSE mergers and acquisitions rule, ADC was required to make a mandatory offer to minority shareholders on the same terms as the rights offer it agreed to underwrite for ABC capital raise initiative.
However, the minority shareholders including International Finance Corporation, Brainworks Capital Management and group chief executive Doug Munatsi, representing ABC Holdings directors, said they would reject the offer it arguing the price was neither fair nor reasonable.
ABCH minority shareholders holding 100,020,038 ABCH ordinary shares, earlier provided irrevocable undertakings that they will not accept the mandatory offer.
While an independent evaluation of the offer deemed the terms and conditions of the offer to be fair it concluded that they were not reasonable, hence minorities decision not to accept the mandatory offer by ADC.
The rationale behind ADC’s, registered in Mauritius, decision to retain the ABC shares includes its plans to unlock significant value in ABC in the next three years through a combination of capital and operational measures.