The Botswana Public Officers Pension Fund (BPOPF), defiantly resisted calls to stage a take-over move of Letshego Holdings Limited despite having reached the 35 percent threshold mark.
Its decision is against all known corporate governance norms in the Mergers and Acquisitions’ sphere.
“The 35 percent automatically triggers a takeover. They should have long called the rest of shareholders and give them an offer based on the last price they paid during the last day they made the transaction,” one financial pundit told Sunday Standard.
Letshego was supposed to have long issued a cautionary once BPOPF reached 35 percent, he observed.
However, BPOPF said it did not have intentions to own the company and it asked for a “waiver” from Botswana Stock Exchange Limited (BSEL).
“It was not our intention to own the company. We do not want to de-list it from the BSE,” BPOPF chief executive officer Moemedi Malindah said in his defence.
“We support Botswana business and we wanted to guard against our members interest by taking 35 percent,” he said.
“We did ask for a waiver from the BSE,” he added.
His comment could blight the image of the BSE which should be an independent regulator.
“Failure to comply with the rules of the BSEL is going to cause a crisis in confidence in the BSEL if investors perceive that there has to be one set of rules for the BPOPF and another for the rest of the market,” an analyst said.
The BPOPF reached a 35 percent shareholding in Letshego 13 months ago. The Botswana Stock Exchange Limited’s (BSEL’s) Rule says issues concerning Mergers and Acquisitions apply – meaning 35 percent stake and take over can be referenced to the South African legislation since Botswana has not yet established its own.
“ Until the Botswana Mergers and Acquisitions Code is in place, the Mergers and Acquisitions Rules refer to the relevant parts of the South African Companies Act No.71 of 2008 and 2011, “ BSE Rules states.
Among other things, that specific pieces of South African legislation impose strict conditions and makes takeover mandatory once you acquire 35 percent and it also imposes strict timetables on transactions. Within one business day after the date of acquisition of at least 35 percent of the target’s shares, the person or entity that has acquired must give notice to the remaining shareholders of the target, making an offer to acquire any and all of the target remaining shares ( section 123 (3), Companies Act).
The South African Merger and Acquisition is the most advanced on the African continent.
The take-over by the grey-hair fund could have been the biggest empowerment move privately initiated in Botswana since records began. Letshego is valued at P 2.67 billion, while the fund stands at P 90 billion in assets under its management.
BPOPF can easily “e-wallet” the remaining shareholders their due including the commercial banks that have “a change of control clauses “that will come due and payable.
BPOPF has got 167,000 members.
Since mid- last year, Letshego is being headed by a polished banker, Aupa Monyatsi and his is busy putting more hours on the clock by building a new team that will exorcise the bad profit streak it experienced last year.
He roped-in Managing Director of Access Bank of Botswana until few weeks ago, Kgotso Bannalothe to oversee Botswana, Eswatini and Lesotho operations, while, Fergus Ferguson—who was in these areas– is headed to troubled operations of East and West Africa.
Letshego is sprawled across 11 countries in Sub Sahara Africa namely; Botswana, Eswatini, Lesotho, Namibia, Mozambique, Uganda, Tanzania, Kenya, Rwanda, Nigeria and Ghana. Ghana , Kenya, Tanzania and Uganda are the trouble-spots that dragged down the company results.
His vision has infused confidence both at New CBD and even with Moody’s, an international credit rating outfit, which said “ Letshego is currently executing its “6-2-5 roadmap” strategy, focusing on product diversification, geographic rebalancing, enterprise agility and corporate structure and creating sustainable stakeholder value.
Letshego is into micro financing, banking, deposit taking. It aims to get into insurance, payments, savings and housing products and to target non-government employees and SMME. It has acquired banking and deposit taking licences in Ghana, Mozambique Rwanda, Tanzania, Nigeria and Namibia.
According to Letshego shareholding Register BPOPF directly held 17.3 percent, and 18.9 percent held it indirectly through a fund called “Active Members & Deffered Pensioners equity fund managed by BIFM. While Botswana Insurance Holdings Limited is at 27.8 percent.