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CA approves Imara takeover bid

Imara Holdings Limited’s attempt at preventing a hostile takeover from FWA Financial Ltd has fallen through following two major developments that tilted the scales in FWA’s way. This week, Competition Authority unconditionally approved the proposed acquisition of 71.23% of the issued share capital of Imara Holdings Ltd by FWA Financial Ltd, leading to a 100% shareholding.


In approving the acquisition, the antitrust body determined through the analysis of the facts of the merger, that the proposed transaction is not likely to result in the prevention or substantial lessening of competition, or endanger the continuity of the services offered in the market under consideration. The market structure in the provision of investment banking, financial products and services to corporate, institutional and private clients will not be altered and as such does not raise any competition concerns.


The regulatory approval is a major victory for FWA, a financial holding company incorporated in Mauritius, as it now set to be a controlling majority shareholder in Imara following a major development that saw high ranking shareholders accepting the takeover offer. A total of 59,494,301 Imara Shares are currently in issue, of which 17,234,046 Imara Shares are held by FWA, representing approximately 28.97% of the issued share capital of Imara. The Offer by FWA was therefore to acquire the remaining 42,260,255 Imara Shares which are currently not held by them. The Offer was made directly to shareholders for a cash consideration of P2.10 per share.


As part of the Offer Conditions, it was announced that that the Offer will become Unconditional once FWA has received valid acceptances in respect of not less than 12,572,599 Imara Shares or such number of Imara’s shares that when aggregated with FWA’s current shareholding results in FWA owning no less than 50.1% in nominal value of IHL Shares after the implementation of the Offer (“Acceptance Condition”). FWA has since announced that as of 16 December 2016 FWA has now accepted offers for IHL shares representing 35,597,118 shares (60%) and, combined with its extant holding such share represents 89 % of the total nominal value of IHL Shares.


FWA has confirmed that if, following the implementation of the Offer, FWA owns more than 80% of the Imara Shares in issue, then it is the intention to approach the BSE to delist Imara on the basis that the requisite shareholder spread is no longer extant. Furthermore, the company said if the Offer is accepted by Imara Shareholders holding such number of Imara Shares as will result in FWA (together with its existing beneficial shareholding) beneficially holding (directly or indirectly) not less than 90% of the entire issued share capital of Imara, then FWA reserves the right to implement a compulsory acquisition of the remaining Shares in accordance with the Botswana Companies Act.


The success of FWA in achieving the threshold they needed for a complete takeover of Imara adds to the drama that has pitied FWA against the Independent Board of Imara which has been desperately fending off FWA’s advances ever since the takeover was proposed. When making its offer to take over the whole of Imara, FWA said Imara has failed to hold steady amid difficult trading conditions in the sub-Saharan African markets in which it operates in.

 

African economies have suffered a sharp decline in the past 18 months, driven by weak commodity prices which led to declines in currencies versus the US Dollar, difficult economic conditions, currency controls, reduced liquidity, lower share prices and reduced equity trading volumes. Indicative of the challenges experienced by Imara is the 50% drop in the value of the flagship Imara African Opportunities Fund in US Dollar terms in the period from 30 April 2015 to 30 September 2016 as a result of the decline in African equity values and redemptions.

 

FWA has also noted that Imara has high central costs for a company of its size, adding that the high central costs reflect the fixed costs associated with its listing on the Venture Capital Board of the BSE as well as fixed costs associated with the complexity of its business model. “In determining the Offer price, FWA has taken in to account IHL’s track record, the value of IHL’s balance sheet at 30 April 2016 and IHL’s growth prospects. FWA therefore considers that the all-cash nature of the Offer allows Shareholders to realise their entire investment at a fair value given the uncertainties facing African economies and IHL at this time,” the acquiring company said.


While it appeared that FWA had made a convincing case for the takeover, the Independent Board rejected the offer price. The board of directors of Imara were obligated to form the independent board for the purpose of considering the terms and conditions of the offer. The Independent Board, in accordance with its obligations in the Takeover Regulations, appointed KPMG as an Independent Expert to provide it with a fair and reasonable opinion regarding the fairness and reasonable of the offer consideration.


“The Independent Board, taking into account the opinion of the Independent Expert that the terms and conditions of the Offer are not fair and not reasonable, has considered the Offer and is of the opinion that the Offer undervalues the Company and, on that basis, recommends that Imara Shareholders reject the Offers,” the independent board advised before adding that the Independent Board considers the offer to be an opportunistic move to take advantage of the current short-term adverse trading environment for the IHL Group and to acquire control of it cheaply.


The Independent Board’s recommendation was to be soon overshadowed by Imara’s interim loss and the biggest blow came through shareholders who somersaulted on the promises not to sell .In an Offeree Response Circular issued by the Independent Board of Imara to Shareholders, it was revealed that Mrs Ann Mackeurtan, a non-executive director, who indirectly holds 2 623 124 shares, has indicated that she will not be accepting the Offer. The board has since released a statement that Mrs. Mackeurtan, having reflected on her original decision, has confirmed to the Independent Board on 9 December 2016,  that she will now be accepting the Offer in respect of all of her shares.


With FWA having exceeded the acceptance condition and the offer now becoming unconditional as to acceptances-which means it has acquired sufficient acceptances from shareholders of Imara- the takeover is certain to go ahead. Imara shareholders will be getting P2.10 per share, which is 19% lower than the current share price. The offer consideration values the entire issued share capital of the company at approximately P125 million, based on shares outstanding. This is lower than the actual market value of Imara which is currently at P154 million on the Botswana Stock Exchange. 

 

Based on the offer consideration, the aggregate value of the consideration payable by FWA to Imara Shareholders is P88.7 million. FWA will be funding the offer consideration by means of internal resources and a line of finance received from Standard Chartered Bank Mauritius Limited.
Imara’s shares have not moved in response to the hostile takeover that begun over two months back, further strengthening the case of FWA to delist Imara after they get complete control of it.

 

When making the offer, FWA reasoned that the offer price of P2.10 per share is attractive to shareholders, providing a liquidity event as well as representing a fair value proposition. The Mauritius based company had made the absence of liquidity for Imara shares on the Venture Capital Board of the BSE a rallying call for shareholders to exit their positions by selling the shares to FWA. The strategy appears to have worked. 

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Food prices continue to rise, but at a slower rate

28th November 2022

Prices for cereals or staple foods in Botswana and other Southern African countries continue to rise at a slower pace, following trends in the global markets, according to the latest November 2022 Food Price Monitoring and Analysis by Food Agricultural Organization (FAO) of the United Nations.

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Still doing business the old way?

18th November 2022

It’s time to get business done better with MTN Business Botswana’s ICT Solutions.

Running a digital businessMTN Business Solutions Botswana, popularly known as MTN Business is an Internet Service Provider. We are a subsidiary of MTN Group Limited, a multinational telecommunications Group headquartered in South Africa, which operates in 19 markets across Africa and the Middle East.

More and more, clients are looking for ways to keep their staff productive in a dynamically changing business environment. Whether your people are working from home, the office or abroad, there is a growing recognition that digitising your operations can offer unprecedented commercial value in flexibility, productivity and growth. This new, digital reality means that it is more important than ever to stay agile – if there is anything that can slow a business down, it is being burdened by othatld technology.

Having made substantial investments in fibre technology, high-speed terrestrial and undersea networks and new frequency spectrum across the markets wherein it operates, MTN is perfectly positioned to respond to this shift in the market.

A few years ago, MTN also made the decision to build an IP capable radio network for its mobile services, giving its core network the ability to seamlessly integrate with enterprise IP networks. The mobile towers deliver services to enterprise clients absolutely anywhere it has a network, shortening the last mile and removing complexity and cost.

Now there is increasing demand from clients to connect their remote sites in all areas, including rural and semi- rural. MTN has assisted clients with overcoming this connectivity hurdle, enabling their staff to get the job done wherever they are.
MTN’s evolution

For MTN, the focus has shifted from just being a core telecommunications services provider, towards also becoming a technology solutions provider. The service offering now also includes Unified Communications, Data Hosting and Cloud Solutions, Security-As-A-Service and Managed Network Services. The scope has changed to being client and industry specific, so the requirements and service portfolio vary from one client to the next. The expectation is that a company like MTN must respond to these challenges, helping clients to get business done better as they shift from old to new technologies.

As many businesses continue to grapple with a digitally dynamic world, they face new challenges that have to be solved. This environment will benefit those that are more digitally enabled and agile. It is a brave new world that will favour online over on-site, wireless over wired and fluid over formulaic. Businesses will seek out partners and suppliers that are every bit as flexible and forward-looking as they are.
Ultimately, clients need partners like MTN Business that will invest in infrastructure, deliver the services they require, have market credibility, are financially sound and have a long-term commitment to their market presence.

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BIE to vitalize the Dignity of Engineers

9th November 2022

Botswana Institution Of Engineers (BIE), has last week hosted a gala dinner in  which they appreciated engineers who worked tirelessly and with dedication for 10 years from 1983 to steer the BIE to its current status.

The event that was held at the Phakalane Golf Estate had brought together young, experienced and veteran engineers and was held under the theme “Vitalize the dignity and eminence of all professional engineers”.

Explaining the theme, the institution’s treasurer, Thanabalasingam Raveendran said that engineers were looked upon reverentially with respect as the educated but with time it seems to have deteriorated. He indicated that there is a need to change the narrative by all means.

“The BIE exists for the welfare and the betterment of us Botswana engineers, we need to recognize specialised units within our Institution. We Engineers strongly believe in Engineers make it happen” Raveendran said.

He indicated that under the theme they appeal to all engineers to energize, to attain quality of being worthy of honour and respect and to achieve recognized superiority amongst the Society.

Raveendran stated that engineers need to ensure their end product is of good quality satisfying the end users expectations and engineers must be honest in their work.

“Approximately 8000 engineers registered with Engineering Regulatory Board (ERB) are not members of the BIE, engineers need to make every effort to recruit them to BIE” he said.

He alluded that BIE being a society, it currently needs to upgrade itself at par with professional institutions elsewhere like the UK and USA.

He further stated that BIE has to have engineering units of specialised disciplines like Civil/Mechanical/electrical etc

“As President Masisi indicated in his inaugural speech, the young people, who make 60 percent of the population of this country, are the future leaders and therefore investing in them is building the bridge to the future” said Raveendran

Kandima indicated that BIE has a memorandum of Understanding with Engineers Registration Board (ERB), where BIE is a recognised provider of CPD training, mentorship programmes and more importantly IPD undertaking to upgrade the skills and know-how of our engineers.

“For us to achieve our mandate and make worthwhile changes to engineering in Botswana, we have to be totally focused and act with intent” said Kandima.

Furthermore, Stephen Williams, past president of the BIE from 1986-1988 told the engineers that  the BIE provides a fertile environment where they can meet, share ideas and grow professionally.

“The BIE is also a nesting place for graduate engineers to learn from their peers and seniors, it also cater for engineering technicians and technologists and so nobody in the technology field is left out” he said.

He further indicated that Botswana Government provides a conductive environment for growth of engineering professionals.

“It must be stated that the Botswana Government recognises the existence of BIE and it can further be stated that the government enables ERB to carry out its mandate as a regulator of engineering professionals” said Williams

He plead with engineering companies to recognize and support BIE as it is the only source of engineering personnel’s for various Industries .

Furthermore, when giving his farewell speech, Michael Pinard , a past president of the institution  said how they are viewed as engineers by the general public might be due to some lack of appreciation as to exactly what role they play in the development of the country.

“The BIE slogan is aptly coined-Engineers make it happen, in other words, what man dreams engineers create” Said Pinard.

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