ABC takeover offer approved

Published: 22 November 2013

ABC HOLDINGS has secured regulatory approval for its mandatory offer to minority shareholders with the board set to recommend whether the minorities should accept controlling shareholder African Development Corporation's US60c per share offer.

The German majority shareholder in ABC made the mandatory offer to minorities in terms of the Botswana Stock Exchange regulations after raising its stake from 23 to 50 percent.

ABC has a primary listing on the Botswana Stock Exchange and secondary listing in Zimbabwe. Its banking operations span Southern Africa including Mozambique, Zambia and Tanzania.

The shareholding increase ran into glitches as the firm struggled to get regulatory approval for the transaction amid fierce differences with minorities over the majority shareholder's US60c offer.

But finance director Mr Beki Moyo confirmed yesterday the pan-African banking group had resolved the sticking issues and could send out a circular to shareholders next week.

"We had issues getting regulatory approval, but these have now been resolved. Anytime the circular (to shareholders) will be going out. I suspect the circular will go out next week," Mr Moyo said.

"That same offer price of US60c will prevail and will be in the circular to shareholders. The price will be explained in the circular and the board has made its view on that price," he said.

Mr Moyo would not be drawn into revealing what position the board had taken other than to say directors will express its opinion whether the offer is fair and minorities should accept or reject it.

Differences emerged between the shareholders over the US60c per share ADC had offered minorities after raising its stake when it underwrote ABC's US$50 million rights issue last year.

While it was not mandatory for the minority shareholders to sell their shareholding in the group, ADC was obligated to make the offer in terms of the BSE mergers and acquisitions rules.

In terms of the BSE's mergers and acquisitions rules any individual shareholder should make a mandatory offer to minorities when they acquire or raise their take above 34,99 percent.

ABC board had to appoint a sub-committee of independent directors to oversee evaluation of the business to appropriately advise minority shareholders whether to sell or keep their shares.

Minorities include the International Finance Corporation, which snapped up about 10,3 percent stake in ABC after exercising an option to convert a 78 million pula (US$9,2 million) loan into equity, Brainworks Capital with 13,6 percent and group chief executive Doug Munatsi at 7,58 percent.

ADC is a German-listed, emerging pan-African banking group. ADC has a strong footprint in Southern Africa through ABC Holdings, a regional commercial banking platform operating in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe as well as in West Africa via Union Bank of Nigeria. Parallel to its banking operations, ADC has a private equity portfolio active in growth markets across sub-Saharan Africa.

- herald

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