TN Bank minority shareholders may cash in if they dispose their stocks to Econet Wireless Zimbabwe (EWZ) at a premium as the telecoms firm moves to take over the banking institution and boost its prescribed minimum capital requirements.
In a circular to shareholders, TN Bank said EWZ was seeking to consolidate its shareholding by acquiring all ordinary shares in the bank it currently does not own.
Under the proposed transaction, shareholders may cash in on the shares or convert the equity into Econet shares at a prescribed ratio.
The conversion ratio implies that a TN shareholder opting for conversion into Econet is being offered Econet shares at a price of 431,85 cents when the stock is currently trading at 445 cents offering a premium of 3%.
However, the cash offer of 15,91 cents offers a 6,1% to the current TN share price.
Therefore, at current trading prices, it would appear that shareholders have a better deal through the cash alternative.
This comes at a time when Econet has already struck a deal with TN Bank founder and largest individual shareholder Tawanda Nyambirai.
Nyambirai has already agreed to relinquish his stake for exchange in equity in Econet Wireless Global.
“The transaction is subject to the approval of Reserve Bank of Zimbabwe (RBZ). An application has been made to the RBZ to approve the holding of up to 100% of TN Bank by EWZ,” EWZ said.
Analysts say that minority shareholders were not in position to block the transaction as Econet already has enough votes to pass the resolution.
Market watchers contend that the underlying beneficiary of the trusts falls within the Econet camp.
The telecommunications company acquired 45% in TN Bank in July last year and now seeks to increase its stake to acquire the entire shareholding of TN Bank.
“EWZ intends to acquire the entire shareholding of TN Bank to enable it to fully align the operations of TN Bank with the strategic interests of EWZ without negatively affecting the interests of minority shareholders in TN Bank,” EWZ said in a statement.
Nyambirai said in December Econet had made an offer to him which he accepted.
“It has not yet gone through the Securities Commission and the Zimbabwe Stock Exchange, but knowing how our markets operate, I thought I must be the first to talk about it before other people did,” Nyambirai said then.