Econet which currently has a 45 percent shareholding in TN Bank will acquire the entire shareholding.
“The directors wish to notify shareholders of TN Bank Limited that the Extraordinary General Meeting scheduled for the 18th of January 2013 as per notice published on the 27th of December 2012 has been cancelled,” Lorcadia Chakurira the bank’s company secretary said today.
In a circular to shareholders this week, TN Bank said EWZ was seeking to consolidate its shareholding by acquiring all ordinary shares in the bank it currently does not own.
Under the proposed transaction, shareholders may cash in on the shares or convert the equity into Econet shares at a prescribed ratio.
The conversion ratio implies that a TN shareholder opting for conversion into Econet is being offered Econet shares at a price of 431,85 cents when the stock is currently trading at 445 cents offering a premium of 3 percent.
However, the cash offer of 15,91 cents offers a 6,1 percent to the current TN share price.
Therefore, at current trading prices, it would appear that shareholders have a better deal through the cash alternative.
This comes at a time when Econet has already struck a deal with TN Bank founder and largest individual shareholder Tawanda Nyambirai.
Nyambirai has already agreed to relinquish his stake for exchange in equity in Econet Wireless Global.
After acquiring the entire shareholding of TN Bank, Econet will recapitalise the bank in line with thresholds set by the Reserve Bank of Zimbabwe in June last year.
“The transaction has no material effect on the earnings per share and net interests value of TN Bank Limited,” said Econet in a circular to shareholders.
“EWZ will pay for the TN shares using Econet Wireless Zimbabwe shares in its treasury stock and there will be no issue of new shares. The transaction will have no material effect on the earnings per share and net assets of Econet Wireless Zimbabwe,” the company said.
If approved, TN Bank will delist from the Zimbabwe Stock Exchange. Apart from approvals from the shareholders, “an application has been made to the RBZ to approve the holding of up to 100 percent (shareholding) of TN Bank by EWZ”.
Post published in: Business