ABC minority shareholders rejects ADC offer

Published: 16 December 2013

ABC Holdings directors are part of minority shareholders that have made irrevocable undertakings that they will not accept the buyout offer by majority shareholder ADC Financial Services.

ADC, a controlling shareholder in the dual-listed ABC, is required to make a mandatory offer to buy shares of all minorities after it gained the majority shareholding after underwriting the regional banking group's $50 million rights offer last year.

The offer is meant to satisfy the regulatory requirements by the Botswana Stock Exchange, where ABC is primarily listed, which stipulates that any company or investor with shareholding exceeding 35 percent should make a mandatory offer to minorities.

The German financial services company had offered to buy out minority shareholders for US0,60c per share after raising its shareholding in ABC above 35 percent to a controlling 51,9 percent.

But following an evaluation of the business by an independent panel of the board, the ABC directors said the US0,60c offer was not reasonable.

Other minority shareholders that have expressed intention to reject the offer include International Finance Corporation and local private equity firm, Brainworks Capital Management Limited.

ABC Holdings group chief executive Mr Doug Munatsi confirmed that the ABC management was part of minority shareholders that declined to take the mandatory offer by the majority shareholder.

"Yes (ABC management rejected the offer) because it is too low (based on an) independent evaluation undertaken by the board," he said.

ABC's second listing is on the Zimbabwe Stock Exchange and operates in seven countries in the Southern Africa Development Community.

"The substance of the opinion and the view of the independent panel of the ABCH board are that the terms and conditions of the mandatory offer are fair, but not reasonable to ABCH shareholders and consequently it is not recommended that ABCH (minority) shareholders accept the mandatory offer," ABC said.

The shareholders holding 100 020 038 ordinary shareholders, representing about 35 percent equity of the group will not take the offer, reducing the amount ADC needed for the buyout as the German company can only buy out up to 15 percent minorities.

ADC is a German incorporated financial services group listed on the Frankfurt Stock Exchange and invested in ABC Holdings through its Mauritius-registered subsidiary, ADC Mauritius.

Trafigura, ADC's largest shareholder, had undertaken to give ADC Mauritius a loan to acquire any of the ABC Holdings shares accepted by offer participants in terms of the mandatory offer.

ADC will repay the loan by transferring the acquired mandatory offer shares, giving Trafigura a direct interest in ABC Holdings Limited.
- herald