Saturday, March 6, 2021

ABCH shareholders headed for war on ADC Financial Services offer

The shareholders of African Banking Corporation Holdings (ABCH) trading as BancABC in the domestic market have been notified of the intention by ADC Financial Services to take full control of the pan-African bank after it announced plans to buy out minority shareholders in ABCH.

However, sources close to the transaction and the company told The Telegraph that, “There is a high likelihood that the shareholders are going to turn down this offer. The current valuation of BancABC is too low and would likely prejudice them (minorities)”.

ABCH on Friday announced through a circular at the Botswana Stock Exchange (BSE) that ADC Financial Services, a German listed, emerging pan-African banking group has offered to buy all the issued ordinary shares in the capital of ABCH, save for the shares already owned by ADC Mauritius.

ADC Financial Services intends to buy the ordinary shares at an issue price of US$0.60 per share and at the exchange rate equivalent of BWP5.05 on the Botswana Stock Exchange (BSE). 

The ADC offer is meant to satisfy the local bourse regulatory requirements, where BancABC is primarily listed, which stipulates that “Any company or investor with shareholding exceeding 35 percent should make a mandatory offer to minorities”. The bank also has a secondary listing at the Zimbabwe Stock Exchange.

The bank has confirmed through a statement that an independent panel of the Board of directors of ABCH has requested an opinion on the fairness and reasonableness of the mandatory offer from an independent expert, Imara Botswana Limited.

It is said that the substance of the opinion and the views of the independent panel of the ABCH Board are that the terms and conditions of the mandatory offer are fair, but not reasonable to ABCH shareholders and, consequently it is not recommended that ABCH shareholders accept the Mandatory Offer.

Apart from this offer, ADC has previously entered pooling agreements with two aligned minority investors of BancABC for a further 7 741 562 shares in the banking group. The underlying shares in the pooling agreements were purchased at a price below US$ 0.60 per share. Through these two pooling agreements, ADC is guaranteed to maintain control of BancABC with 50.1 percent majority despite the recent debt conversion by the International Finance Corporation.

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