CFX/Century deal almost sealed

Shakeman Mugari

THE merger talks between CFX Merchant Bank and Century Holdings Ltd have reached an advanced stage with information this week that the deal could be sealed anytime now.


The two institutions are finalising what sources called “technical issues” before signing what is likely to be the biggest deal in the financial sector since the crisis bedevilling the financial services sector began.


Century company secretary Nick Nyamusa said he could not comment as talks were continuing.


He said Century Holdings were bound by Zimbabwe Stock Exchange (ZSE) regulations.


“I cannot comment,” Nyamusa said. “The deal is still in its infancy and it would not be proper for us to give information to the papers. Remember we also have shareholders who are supposed to be informed before anyone else.”


However, sources said some members of the Century board of directors met on Wednesday afternoon to discuss logistical issues concerning the deal.

They are understood to have reached a consensus to enter into the transaction.


The deal is likely to include the bank divisions of the two institutions forming a solid financial power house.


Century Holdings is understood to have tabled Century Bank as part of its bargain package.


CFX has also brought in their merchant bank division to the fore in a bid to lure Century Holdings.


Analysts said Century was entering the deal as a survival strategy while CFX is seeking a listed partner.


Century is struggling to shake off market perceptions that it is one of the struggling local banks. If the marriage goes through Century would also receive a boost in the form of liquid and managerial support.


CFX Merchant is keen on the deal to benefit from the commercial bank advantage of Century.


Experts say by going into Century, CFX would be well-positioned to secure cheap funds that come with commercial banking.


The experts however doubt whether the deal will improve the impression that has already taken hold.


“There will need to be a change in the Century board of directors and possibly a rebranding to turn fortunes around,” said an expert in the banking sector.


CFX is under instructions from the banking authorities to reorganise its shareholding by March next year.


Sources at Century however said a breakthrough was not guaranteed as minor issues could scuttle the deal.


“This is a major deal and could be scuttled by a small issue. So there are chances that even at the very end of the deal, the talks might break down,” said a source in Century.

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