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Barbican backtracks on deal

Ngoni Chanakira

BARBICAN Holdings Ltd (Barbican) and Zimbabwe Platinum Mines Ltd (Zimplats)’ four-month flirtation is now over.


Bar

bican this week withdrew its bid for a 40% stake in Zimplats – a lucrative mining conglomerate listed on the Johannesburg (JSE) and Australian stock exchanges (ASE).


The four-month flirtation had witnessed the Zimplats share price skyrocket on the ASE and JSE as news of new investors offering a better price floated around.


In an interview Barbican chief executive officer Mthuli Ncube said his financial institution had decided to withdraw from the lucrative deal because the shares on offer had been diluted and were “now too insignificant to make any meaningful contribution” to the company’s portfolio and earnings.


“Today (Monday) we are writing to Zimplats informing them that we are no longer interested in the shares on offer,” Ncube told businessdigest.


“We were now being offered around 5% from the original 40% allotted to minority shareholders. This amount is insignificant and not worth it and we are now formally withdrawing our bid.”


Ncube, a prominent banker, surprised the market and apparently ruffled political feathers when he made a hostile bid for a 40% stake in Zimplats.


The offer countered one made by South African-based Impala Platinum Holdings Ltd (Implats) in June.


The major Zimplats shareholders then were Implats (50,53%), National Nominees Ltd (8,24%), and Citicorp Nominees (pty) Ltd (6,73%).


Implats first increased its shareholding in Zimplats to 50,53% through the acquisition of prominent banking group Absa’s stake.


Last week Implats further increased this stake to 61,4%, a move Barbican claimed “was meant to scuttle its bid”.


Zimplats has huge deposits of platinum and palladium around the world and Barbican intended to tap into this major investment.


As at June 30, 89 285 360 fully-paid and quoted shares were on issue at Zimplats.


Problems arose for Barbican when it dilly-dallied after Zimplats asked the financial services institution to furnish it with details on how it would raise US$130 million required for the deal at a time when Zimbabwe was facing a serious foreign currency shortage.


Barbican has a market capitalisation of about $9 billion, making it the least capitalised bank on the Zimbabwe Stock Exchange (ZSE) after Century Holdings Ltd ($32 billion).


Insiders said the issue had taken a political twist because Ncube is also chairman of the National Investment Trust (NIT) tasked by government to ensure that indigenous stakeholders took a 15% stake in Zimplats.


The NIT, however, struggled and failed to raise sufficient cash to snap up the 15% stake on offer.


In terms of the agreement entered into on November 20 last year between Zimplats and Implats, the latter would be making an offer to minorities at Australian $4,08 a share.


The offer document from Implats and the Zimplats recommendation to shareholders was sent to shareholders in July.


Ncube said this offer was “too low” and had countered with one of A$5. He, however, did not send documentation to Zimplats but promised to do so “soon”.


Backroom lobbying immediately began after Ncube sent his company’s letter of intent causing Zimplats to query how he would raise the required US$130 million – the value of the total shares on offer.


Ncube caught the financial sector off guard when he made another hostile bid culminating in the take-over of Haddon & Sly Ltd, a Bulawayo-based family business, to reverse-list Barbican on the ZSE.


The banker is also involved in yet another lucrative mining venture, the Independence Gold Mine where he has as partners, Mzilikazi Khumalo, a South African business and mining magnate, and John Mkushi, who sits on several influential boards in Zimbabwe.


While Ncube did not reveal his partners for the Zimplats deal, insiders said he intended to enter with the same team, utilising Khumalo’s access to foreign currency, which is plentiful in South Africa.

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