FINANCIAL giant CBZ Holdings Limited (CBZ) has finalised the purchase of shares in First Mutual Holdings Limited (FMHL) taking its total stake to 36,22% in the firm, as it seeks to strengthen its balance sheet through mergers and acquisitions.
In 2021, CBZ announced that it would acquire a 31,22% stake in FMHL from the firm’s majority shareholder, the National Social Security Authority (NSSA), which at the time held 65,53% shareholding.
However, before the transaction was completed, CBZ purchased a 2% stake in FMHL on top of an existing 3,22% shareholding, which together with the purchase from NSSA will take the total shareholding to about 36,22%.
Responding to questions from NewsDay Business during the signing of the purchase agreement in Harare yesterday, CBZ group chief executive officer Blessing Mudavanhu said: “This is really in line with our growth strategy as articulated at our last CBZ Holdings analyst briefing at the AGM (annual general meeting).
“So, it gives us great pleasure to say to the market that CBZ has registered a significant milestone in pursuit of acquiring not only 31%, but we are also claiming an additional 5%, taking it to 36% in FMHL. The reason being we have seen significant synergies in First Mutual and CBZ Holdings.”
Mudavanhu hinted that future mergers and acquisitions were in the pipeline.
“In my opening remarks, I put emphasis on strengthening our balance sheet. So over the last five years or so there has been organic growth and we are going to also try organically such as the union that you are seeing between ourselves (NSSA, FMHL and CBZ) here,” he said.
“So, we will be interested to the extent that there are synergies. Not just ZB, but it could be any other bank, it could be Stanbic Bank, to the extent that we have those synergies we will be willing to pursue mergers.”
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Mudavanhu further indicated that a stronger balance sheet may attract foreign investors which is part of their strategy.
FMHL group chief executive officer Douglas Hoto talked about the assets under management pre-transaction of US$180 million which will now increase following the acquisition by CHL.
“First Mutual Wealth, non-property, is managing about US$60 million to US$65 million if you add the FMP (First Mutual Properties) that will take it to about US$180 million,” he said.
Mudavanhu added that Datvest, CBZ’s asset management firm, had assets valued at US$280 million.
“I think you wanted the numbers so those are the numbers, about US$500 million post transaction,” he said.
CBZ’s purchase of FMHL entailed buying 226 997 219 shares in the latter, from NSSA, of which 30% of the total consideration would be settled in cash, about US$21 million.
The remaining 70% will be settled through the issuance of 46 833 110 new CBZ ordinary shares based on 28 CBZ ordinary shares for every 95 FMHL ordinary shares that is one CBZ ordinary share for every 3,393 FMHL ordinary shares held by NSSA.
According to CBZ, the FMHL acquired shares will constitute 8,23% of the CBZ’s total issued ordinary shares after the transaction resulting in changes in the shareholding structure of the latter.
Resultantly, NSSA would see its existing shareholding in CBZ grow to 24,91%, from a pre-transaction level of 18,17%, making the authority the largest shareholder.