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CBZ Holdings Limited (CBZHL) has withdrawn its proposed mandatory offer to minority shareholders of First Mutual Holdings Limited (FMHL) after the Competition and Tariff Commission (CTC) capped its stake in the insurer at 31.22%.
The CTC’s decision, announced on November 29, 2024, rejected CBZHL’s bid to acquire additional FMHL shares, citing concerns about market competition and consolidation.
CBZHL had initially announced its intention to make a mandatory offer on October 31, 2024, triggered by its significant shareholding in FMHL. However, the CTC’s ruling has put an end to the proposal.
Market analyst Shingai Dumba said the decision reflects the regulator’s growing vigilance in maintaining a level playing field. “Allowing CBZHL to acquire more shares could have raised concerns about competition and market dynamics,” she explained.
Ms Rumbidzayi Jakanani, CBZHL’s group chief governance officer, confirmed the decision in a notice issued yesterday.
“In light of the decision by the CTC, shareholders of FMHL are hereby advised that CBZHL will no longer be proceeding with the mandatory offer to the minority shareholders in First Mutual Holdings Limited. No further announcements will be made in respect of this issue,” she stated.
The move preserves the status quo for FMHL’s minority shareholders, ensuring CBZHL remains a significant but non-controlling shareholder. However, some shareholders may be disappointed, as mandatory offers often come with premiums above market prices.
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