Mandatory bid on the cards as CBZ merges FMHL

Nyashadzashe Ndoro

CBZ Holdings Limited has started the process of valuating a fair and reasonable price on the mandatory offer to minority shareholders in First Mutual Holdings Limited after the banking group acquired 36.35% shareholding in the insurance and pension company.

A mandatory offer, also called a mandatory bid, is a process exercised during mergers and acquisitions of businesses, where the acquiring company or bidder, after buying more than 30% shareholding, is allowed to purchase some or all outstanding shares of the target business, as required by securities laws and regulations or stock exchange rules.

After acquiring 36.35% of FMHL, one of Zimbabwe’s leading financial services companies, CBZHL is now at the stage of valuating a fair and reasonable price on the mandatory offer in accordance with the Zimbabwe Stock Exchange Listing Requirements.

A notice to FMHL shareholders relating to the offer by CBZHL to minority shareholders in FMHL, signed by the banking group's governance officer, Rumbidzayi Angeline Jakanani, reads:

“Further Notice to Shareholders of FMHL issued by CBZH on 10 October 2023 relating to the acquisition by CBZH of a 36.35% shareholding in FMHL, shareholders are advised that CBZH is in the process of engaging all relevant stakeholders and is at the stage of valuating a fair and reasonable price on the Mandatory Offer in accordance with the ZSE Listing Requirements and the Companies and Other Business Entities Act (Chapter 24:31).”

After the acquisition of FMHL shares in September last year, Blessing Mudavanhu, the CBZHL chief executive, said the move had marked a significant milestone in the group’s pursuit of its long-term growth strategy.

“Our strategic thrust on the significant acquisition is to move towards merging the operations of CBZ Holdings and First Mutual Holdings to achieve the scale needed to compete against larger corporates in Zimbabwe and the region,” he said.

“This transaction offers diversity and synergistic opportunities among the operational units of our two businesses. The exploitation of synergies between these two businesses should unlock more value for the combined entity, looking to enhance its insurance and property businesses further and widen its product offering to its significant client base.

“Combining these with the advantages of the largest bank in the country will present a well-oiled bancassurance model to the Zimbabwe market."