News / National
CBZ blocked from increasing FMHL stake
10 Dec 2024 at 06:52hrs | Views
CBZ Holdings has confirmed that it will not proceed with its planned buyout of minority shareholders in First Mutual Holdings Limited (FMHL), following a decision by the Competition and Tariff Commission (CTC) to block the move. The commission has ruled that CBZ Holdings must maintain its 31.22% stake in FMHL, which was acquired in September 2023.
The ruling comes after CBZ Holdings purchased a 31.22% shareholding in FMHL from the National Social Security Authority (NSSA), which previously held a 65.53% stake in the company. This acquisition increased CBZ's total stake in FMHL to 36.22%, given the financial group's existing 5% shareholding.
In line with the Zimbabwe Stock Exchange (ZSE) listing rules, CBZ was required to make a mandatory offer to buy out the remaining shareholders in FMHL, as their stake had surpassed the 35% threshold. However, the CTC's decision prevents CBZ from making this offer, and the financial group has now confirmed it will not pursue further acquisition of FMHL shares.
In a statement released yesterday, CBZ Holdings said, "Shareholders are advised that the Competition and Tariff Commission (CTC) made its final decision on November 29, 2024, regarding CBZ Holdings' application for approval to acquire additional shareholding in FMHL through a mandatory offer. The CTC has resolved that CBZ Holdings Limited must maintain its 31.22% shareholding in FMHL, which was initially approved by the commission."
The decision comes as a setback for CBZ Holdings, which had hoped to expand its regional presence by leveraging FMHL's existing operations. CBZ Holdings CEO, Lawrence Nyazema, had previously shared plans to use FMHL as a vehicle for regional expansion, citing the company's established footprint in southern Africa.
Nyazema had envisioned that acquiring additional shares in FMHL would strengthen CBZ's balance sheet, supporting its regional expansion goals. As of September 30, 2024, CBZ Holdings reported total assets worth ZiG30.05 billion (approximately US$1.2 billion).
The decision by the CTC has left CBZ Holdings with its current shareholding and no immediate plans to increase its stake in FMHL, at least for the time being. The financial group has yet to comment on whether it will explore other options for regional expansion in light of the ruling.
The ruling comes after CBZ Holdings purchased a 31.22% shareholding in FMHL from the National Social Security Authority (NSSA), which previously held a 65.53% stake in the company. This acquisition increased CBZ's total stake in FMHL to 36.22%, given the financial group's existing 5% shareholding.
In line with the Zimbabwe Stock Exchange (ZSE) listing rules, CBZ was required to make a mandatory offer to buy out the remaining shareholders in FMHL, as their stake had surpassed the 35% threshold. However, the CTC's decision prevents CBZ from making this offer, and the financial group has now confirmed it will not pursue further acquisition of FMHL shares.
In a statement released yesterday, CBZ Holdings said, "Shareholders are advised that the Competition and Tariff Commission (CTC) made its final decision on November 29, 2024, regarding CBZ Holdings' application for approval to acquire additional shareholding in FMHL through a mandatory offer. The CTC has resolved that CBZ Holdings Limited must maintain its 31.22% shareholding in FMHL, which was initially approved by the commission."
The decision comes as a setback for CBZ Holdings, which had hoped to expand its regional presence by leveraging FMHL's existing operations. CBZ Holdings CEO, Lawrence Nyazema, had previously shared plans to use FMHL as a vehicle for regional expansion, citing the company's established footprint in southern Africa.
Nyazema had envisioned that acquiring additional shares in FMHL would strengthen CBZ's balance sheet, supporting its regional expansion goals. As of September 30, 2024, CBZ Holdings reported total assets worth ZiG30.05 billion (approximately US$1.2 billion).
The decision by the CTC has left CBZ Holdings with its current shareholding and no immediate plans to increase its stake in FMHL, at least for the time being. The financial group has yet to comment on whether it will explore other options for regional expansion in light of the ruling.
Source - The Chronicle
