gtag('config', 'UA-12595121-1'); Colcom minorities cling to shares – The Zimbabwe Mail

Colcom minorities cling to shares

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COLCOM Holdings this week issued a further cautionary on a planned offer to minorities by major shareholder, Innscor Africa, four months after the first cautionary in May.

The delay in making the offer has triggered speculation that Innscor may now be in a fix over an offer price, with suggestions minorities may opt for cash rather than scrip in the group under a share swap deal. The Colcom share price traded at 15,25 cents when the announcement was first announced on May 10. It has since skyrocketed, trading at 50,25 cents on Tuesday. Bids for the Colcom shares were as high as 60 cents on Tuesday, with no sellers.

The Innscor share closed at 23,20 cents on the day the cautionary statement was first issued, but had leapt to 120 cents in Tuesday’s trade when 62 033 shares changed hands. In its first cautionary, Colcom announced: “Shareholders are advised that the Colcom Holdings Limited board of directors has received notification from its major shareholder, Innscor Africa Limited of its intention to extend an offer to minority shareholders for the purchase of their Colcom shares in exchange for Innscor shares.”

It said it was also the intention of the company to apply to the Zimbabwe Stock Exchange for a voluntary delisting in terms of Section 1 of the Zimbabwe Stock Exchange Listing Requirements once the offer was successfully implemented. On Tuesday, Colcom reminded shareholders about the offer, saying it would provide further “details regarding the transaction by way of a circular in due course”. Brokers said Colcom shareholders were not selling, resulting in no trades on the counter.

“They probably want higher prices,” said one broker, commenting on the absence of sales at 60 cents per share. Securities traders said they expected many shareholders to accept the offer for an exchange of Colcom shares for Innscor shares. They said many shareholders were unwilling to dispose shares for cash, which is now experiencing an erosion of value due to money supply growth caused by money printing to fund excessive government expenditure.

They indicated that Innscor was likely to use the share prices on the date the first cautionary statement was issued rather than prices currently obtaining on the market now characterised by a bull run. Share prices have been skyrocketed mainly due to inflation fears. – Fingaz