ABC engages independent advisors

Harare Bureau
ABC Holdings’ board has appointed a sub-committee of independent directors to oversee evaluation of the business in order to appropriately advise minority shareholders on whether to sell or retain their shareholding. Currently there are huge differences in the ABC Holdings family between Frankfurt Stock Exchange listed majority shareholder ADC and minorities over the share price that the former has offered to buy out minorities.

ADC is required in terms of the Botswana Stock Exchange rules, where ABC Holdings has its primary listing, to make a mandatory offer to buy out minorities after increasing its stake from 23 percent to over 50 percent.

But differences have emerged between shareholders over the 60c per share ADC has offered minorities after raising its stake when it underwrote ABC’s $50 million rights issue last year. The minorities consider the offer too low.

ABC Holdings group chief executive Mr Douglas Munatsi said in an interview last week that the group would engage independent financial advisors to determine the value of the business in order to guide minority shareholders.

“The board has appointed a sub-committee of independent directors who are actually overseeing that whole process so we will go to a party such as Deloittes, KPMG, Imara or ourselves because that is what we do in our investment business.

“When that party gives an opinion to say ‘we the think the price is X’, the independent committee of the board is going to advise the whole board.
“We are not independent, we are not allowed in that sub-committee, there also are some shareholders who are not independent.

“As a group or as a board we will then be advised to say this is what the advisors are saying and this is what they recommend, that is when we will then take a decision as a board and then we will advise shareholders to say 60c is too low or too high and recommend that you sell or that you don’t,” Mr Munatsi said.

The ABC Holdings CEO was explaining measures employed to ensure minorities are fully informed on whether to accept ADC’s offer or choose to retain their shareholding.

Mr Munatsi said minorities were not being forced to sell, but ADC was compelled to make the mandatory offer in terms of the mergers and acquisitions rules of the Botswana Stock Exchange when a shareholder raises its stake above 34,99 percent.