THE Securities Commission of Zimbabwe (SECZ) has endorsed Econet Wireless Zimbabwe (EWZ) planned takeover of TN Bank describing an offer to minorities as fair, an official has said.
Report by Bernard Mpofu Chief Business Reporter
The development comes at a time when some market watchers had raised eyebrows on the deal, warning that minorities could be shortchanged.
“Every shareholder has a right. Econet, which currently holds 45%, has already struck a deal with Nyambirai and under ZSE (Zimbabwe Stock Exchange) rules a majority shareholder like Econet can make an offer to minority shareholders to buy them out,” said SECZ chief executive officer Tafadzwa Chinamo.
“What we look at as a commission is whether or not that offer was fair. Given the current share price, the commission feels that the offer was fair.
“The shareholders should now look ahead at the issue of capitalisation of the bank.”
Econet offered a share swap and buyout of TN shareholders in a bid to shore up the bank.
The mobile phone operator has already struck a deal with TN founder Tawanda Nyambirai.
Nyambirai has already agreed to relinquish his stake in exchange for equity in Econet Wireless Global. Should this deal sail through, TN would delist from the ZSE.
Analysts said minority shareholders were not in a position to block the deal given the control Econet already has.
Under the proposed transaction, minority shareholders may cash in on their shares or convert their shareholding into EWZ 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, a cash offer of 15,91 cents offers a 6,1% premium to the TN share price.
This, therefore, means that at current trading prices, it would appear that shareholders have a better deal through the cash alternative.
Meanwhile, TN bank yesterday cancelled its proposed extra-ordinary general meeting that was initially scheduled for January 18.
No reasons where given for the cancellation.