Econet seeks TN Bank takeover
Zimbabwe’s largest mobile phone operator, Econet, has moved to acquire the entire shareholding in TN Bank through a share swap deal.
The mobile operator has integrated its mobile money transfer service, EcoCash, to the bank and companies that have signed agreements to take EcoCash payments instead of cash redeem at the financial institution. The largest financial institution in the country, CBZ Holdings, is also integrated into the EcoCash system and plans are afoot to get most of the banks in the country on the platform.
Also, about 50% of EcoCash’s 1.8 million subscribers transact through the bank, which Econet acquired as part of a strategy to grow the subscriber base of the mobile money transfer service.
Econet already holds 45% of TN Bank, which is listed on the Zimbabwe Stock Exchange, and wants to acquire the remaining shares through the share swap of one Econet ordinary share for every 28,79 bank shares.
Alternatively, TN Bank shareholders can get US15,91c for each TN Bank ordinary share held. The price is about half the listing price of US32,08c in June last year.
The minority shareholders, with a combined 30,46 percent shareholding, have indicated they would accept the offer.
TN Bank founder Tawanda Nyambirayi said he had already accepted Econet’soffer of shares, which will make him a minority shareholder in the telecoms company which he served as chairman from 2003 until his resignation last December.
“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.”
Econet said apart from approvals from the shareholders, it had made an application to the Reserve Bank of Zimbabwe to approve the company holding of up to 100 percent of TN Bank.
TN Bank will also delist from the Zimbabwe Stock Exchange, where Econet is also listed.