BANKING giant CBZ Holdings has taken over Beverley Building Society for a smart £3,5 million in a major coup marking the beginning of the institutio
n’s conquest in the money-spinning financial services sector, businessdigest can reveal.
The acquisition will increase CBZ’s asset base to well over $40 billion, making it one of the biggest financial institutions in the country.
CBZ’s asset base was at $33 billion by June 30, while that of Beverley was at $7,7 billion.
CBZ’s other subsidiaries include commercial bank, CBZ Bank, and asset management firm, Datvest.
The group is in the process of setting up a property firm.
Details of the transaction, valued at $1,7 billion in local currency at the ruling official exchange rate or $4 billion at the parallel exchange rate, emerged as CBZ announced plans for an extraordinary general meeting (EGM) seeking shareholder approval for acquisitions of complementary businesses.
Beverley, for a long time a sitting duck for a potential takeover, had been subject to speculation of an imminent marriage with CBZ since January this year. The building society had, however, been subject to failed takeover bids since 1998.
Sources said talks between the two financial institutions had been concluded during the first week of September after parties to the deal agreed on the price and take-over modalities.
The sources told businessdigest that CBZ was completely buying out Beverley Building Society’s majority shareholder, Andrew Weir & Company, a United Kingdom-based family company.
Beverley is Zimbabwe’s second largest mortgage lender after the Central African Building Society (Cabs), wholly-owned by financial behemoth, Old Mutual.
A small part of the building society is owned by its workers through a trust.
According to the conditions of the deal seen by businessdigest, CBZ will pay the £3,5 million in hard currency directly to the UK account of Andrew Weir & Company.
Details obtained by businessdigest indicate that the final deal to the transaction was signed on September 8 in the capital with representatives of Beverley’s major shareholders.
CBZ is already seeking regulatory approval from the Reserve Bank of Zimbabwe and the Competition and Tariff Commission before proceeding with the deal.
Sources at both Beverley and CBZ said parties to the deal had agreed that the final modalities of the takeover be finished by October 31 at which CBZ anticipates to have received relevant approval from regulatory authorities.
A source said CBZ was likely to issue a cautionary statement advising shareholders of the potential addition to the family of Beverley, but this was likely to be done after the EGM scheduled for October 18.
At the EGM, the CBZ board will seek authority from shareholders “to proceed with any acquisitions that in the directors’ view are, or would be, complementary and related to the company’s business”.
A notice to shareholders said the acquisitions would be undertaken “after the necessary assessment, scrutiny and due diligence provided the acquisitions comply with the criteria established in the business growth proposal”.
The proposal is contained in a circular currently being sent out to shareholders.
Businessdigest understands that a due diligence exercise had already been undertaken at Beverley and that directors were satisfied that the acquisition meets the proposed growth strategy.
CBZ chief executive, Nyasha Makuvise, declined to comment on the issue when contacted for comment yesterday. Beverley’s managing director, Mike Moyo, could not be contacted for comment at the time of going to press.
CBZ was born out of the Bank of Credit and Commerce Zimbabwe (BCCZ) which was started in 1983 but collapsed in 1991 following the demise of international parent Bank of Credit and Commerce International (BCCI).
Government took over the BCCZ and later changed its name to the Commercial Bank of Zimbabwe (CBZ), with Reserve Bank governor Gideon Gono as its first managing director.