INTERMARKET Holdings Ltd (Intermarket) will effectively take over Mashonaland Holdings Ltd after the proposed rights issue, sources said this week.
Indications are that after the proposed rights issue, the life group will over take Security Nominees as the largest individual shareholder in Masholds.
Security Nominees, which is owned by Anglo American Corporation Zimbabwe currently holds a controlling stake with 31,26 % in Mashholds, while Intermarket Life has an 18,12 % stake in the property company.
After the proposed deal Security Nominees will be diluted to cede control to Intermarket who are likely to clinch 45% of the group.
Anglo American Corporation Zimbabwe will become the second largest shareholder through Security Nominees with a 21% stake.
The rights issue is however, subject to approval by Masholds shareholders at an Extraordinary General Meeting (EGM) to be held next week.
Although the Masholds circular to shareholders does not refer to the deal as a take-over, businessdigest understands that Intermarket is on the verge of taking over the property company from Anglo.
According to post right issue analysis carried out by some analysts in the market when Intermarket was given its shares in exchange for properties that they are putting into the transaction, they will become the major shareholders.
Jill Day, public relations consultant for Mashholds confirmed that the deal represented a take-over.
“Intermarket will be the major shareholder when the deal is complete. We should also remember that they are also the underwriters who stand to get more shares should the other shareholders choose not to follow their rights,” said Day.
After the rights issue Intermarket will have 816 963 million shares which translate to 45% of Mashholds.
Chances are also high that Intermarket may further consolidate its position in Masholds, as they are the underwriters of the rights issue.
“They are underwriting the deal and therefore, have a chance of taking extra shares if other shareholders choose not to follow their rights,” said an analyst who has been following the deal closely.
“They will achieve 45% if everyone follows their rights. But if some shareholders do not follow rights there are chances their stake might increase to more than 50%.”
The results of the rights issue will also mean that Masholds has been turned into a property firm for Intermarket.
According to a circular, Mashholds shareholders will go on the market to raise funds to purchase five high-rise buildings from Intermarket.
The amount raised will be used to acquire Charter House and industrial and residential areas at market “deep discount to replacement cost”.
Intermarket Life Assurance managing director, Ambrose Chinembiri said the company had no intention to swallow Masholdings. “We are only creating a partnership with a purposeful property specialist to deliver value to shareholders and policy holders,” said Chinembiri.