CBZ Holdings Limited (CBZHL) shareholders will meet at an extraordinary general meeting next month to approve the proposed acquisition of a 31.22% stake in First Mutual Holdings Limited (FMHL) as part of the group’s diversification and consolidation strategy.
If the transaction is approved by shareholders, it will take CBZHL’s stake in FMHL to 34.44% as it already has a 3.23% shareholding.
The January 31 EGM comes after CBZHL announced in October that it had entered into a share purchase agreement to acquire the 31.22% stake in FMHL currently held by the National Social Security Authority (NSSA).
CBZHL will acquire 226,997,219 FMHL ordinary shares at a total consideration of ZWL$6,355,922,132 (a price of ZWL$28 per FMHL ordinary share).
Thirty percent of the total value (ZWL$1, 906,776,640) which is equivalent to US$21,197,440 will be paid in cash.
Of that cash payment, US$10m will be paid within 10 days of the fulfillment or waiver of the condition precedent and the balance of US$11,197,440 will be paid over 18 months in three equal installments of US$3,732,480, CBZHL said in a circular to shareholders.
Seventy percent of the transaction value will be settled through the issuance of 1 CBZHL ordinary share for every 3.393 ordinary shares held by NSSA.
Post the transaction, NSSA will emerge as the largest shareholder in CBZHL with a stake of 24.91%.
CBZHL will emerge as the second-largest shareholder in FMHL but will consolidate its position by acquiring a control block of 35%, subject to shareholder approval at the January 31 meeting.
Shareholders have to approve whether or not to give directors the greenlight to make strategic acquisitions through the issuance of shares up to 10% of the unissued shares under the control of directors.
CBZHL has been on a transformation drive since the appointment of board banker Marc Holtzman as board chairman in September 2019. – Business Times