Crushing rejection of ABC buyout offer
Brian Benza | Friday January 31, 2014 17:31
Crushing rejection of ABC buyout offer
BRIAN BENZA
Staff Writer
Shareholders owning over 45% of ABC Holdings (ABCH) have rejected a buyout offer from controlling stakeholder, African Development Corporation (ADC).
In a statement to the Botswana Stock Exchange (BSE,) ABCH announced that those with 10,196,468 shares accepted the P5.05 per share offer representing a mere 3.97 percent of the banking group's 256 million issued shares.
'As a result of the mandatory offer, ADC increased its controlling position including voting pool agreements from 50.1% to 54.1%,' says a statement released by the bank this week.
ABCH is the holding company for retail bank, BancABC, which has operations in five southern African countries. Following last year's $50 million (P450 million) rights issue, the German financial services group, ADC, raised its stake in ABCH to 51.9%. This was diluted to 47.1% last May due to a conversion by the International Finance Corporation (IFC) of a $12 million convertible loan granted to ABCH into equity. According to BSE regulations, if a shareholder increases its stake to or above 35% in a listed entity, it would then be obliged to make a buyout offer to the rest of the shareholders.
The German financial services company had offered to buy out minority shareholders for $0.60 or P5.05 per share. But following an evaluation of the business by an independent panel of the board, the ABCH directors and other shareholders said the offer was not reasonable. The banking group stock on the BSE is currently trading at P5.11.
ABC Holdings directors are part of minority shareholders holding over 100 million shares that have rejected the P5.05 per share buyout offer. ADC invested in ABC Holdings through its Mauritius-registered subsidiary, ADC Mauritius. BancABC is a regional banking group with 50 branches and 1,000 employees in five Southern African Development Community (SADC) countries - Botswana, Zimbabwe, Zambia, Tanzania and Mozambique.
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 Mauritius is the investment holding entity for the ADC group, controlling investments in ABCH, Union Bank of Nigeria and a portfolio of proprietary investments. Trafigura is already present in Botswana and most African countries through their shareholding in oil company, Puma Energy.
In a statement to the Botswana Stock Exchange (BSE,) ABCH announced that those with 10,196,468 shares accepted the P5.05 per share offer representing a mere 3.97 percent of the banking group's 256 million issued shares. 'As a result of the mandatory offer, ADC increased its controlling position including voting pool agreements from 50.1% to 54.1%,' says a statement released by the bank this week.
ABCH is the holding company for retail bank, BancABC, which has operations in five southern African countries. Following last year's $50 million (P450 million) rights issue, the German financial services group, ADC, raised its stake in ABCH to 51.9%. This was diluted to 47.1% last May due to a conversion by the International Finance Corporation (IFC) of a $12 million convertible loan granted to ABCH into equity. According to BSE regulations, if a shareholder increases its stake to or above 35% in a listed entity, it would then be obliged to make a buyout offer to the rest of the shareholders.
The German financial services company had offered to buy out minority shareholders for $0.60 or P5.05 per share. But following an evaluation of the business by an independent panel of the board, the ABCH directors and other shareholders said the offer was not reasonable. The banking group stock on the BSE is currently trading at P5.11.ABC Holdings directors are part of minority shareholders holding over 100 million shares that have rejected the P5.05 per share buyout offer. ADC invested in ABC Holdings through its Mauritius-registered subsidiary, ADC Mauritius. BancABC is a regional banking group with 50 branches and 1,000 employees in five Southern African Development Community (SADC) countries - Botswana, Zimbabwe, Zambia, Tanzania and Mozambique.
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 Mauritius is the investment holding entity for the ADC group, controlling investments in ABCH, Union Bank of Nigeria and a portfolio of proprietary investments. Trafigura is already present in Botswana and most African countries through their shareholding in oil company, Puma Energy.