Majority shareholders in funerals services company, FSG Limited have announced an intention to buy minorities out of the firm before delisting the company from the local bourse.
In a notification to the Botswana Stock Exchange (BSE), Botswana Life Insurance Limited, Flip Coin, Kate Maphage, Petronella Matumo and Tebelelo Seretse, who together jointly hold 75.35% of FSG, said they are seeking to purchase the remaining 24.65% shareholding for P83 million.
“The offerors have given to the board of the company a formal notice of an offer to purchase all the ordinary issued shares in the company currently not held by them. This will enable those shareholders wishing to sell to exit their shareholding in the company by reason of the fact that its shares will be delisted from trading on the BSE.
“Application has been made to the BSE for delisting of the issued shares in the company from trading on the BSE with effect from December 4, 2015, subject to implementation of the offer and passing of the special resolution for delisting,” read the notification.
The 24.65% shareholding to be bought at a price of P2.80 share represents 29. 8 million ordinary shares.
The P2.80 offer price translates to a paltry three percent premium on FSG’s current P2.72 trading price on the stock market.
The offer will open on October 21, 2015 and close on December 4, 2015.
Founded by managing director, Milivojoe Nikolic and his wife Lynette in 2003, FSG listed on the local stock exchange in 2008.
According to the statement, the offerors have deposited P83.4 million with
Stanbic bank, which will be used to pay the minority shareholders who would have accepted the offer.
“Stanbic Bank of Botswana Limited has issued a letter to the company and the BSE that it holds the amount of P83,435,618 in trust to be used to settle the purchase price due to the shareholders who accept the offer, pending completion of the offer,” read the statement.
FSG recorded a 13% rise in profit after tax to P13.2 million in a subdued first six months of 2015 that was characterised by low demand and stagnant personal incomes.
In the period, revenue rose by 18% to P84 million, with Botswana operations showing resilience in a lukewarm economy.
The company, which also has operations in Zambia and South Africa, has a 65% market share in Botswana.
For the period, the directors declared an interim gross dividend of seven thebe per share, subject to the deduction of withholding tax at 7.5 percent.
Two years ago, Botswana Life’s parent company, failed in an attempt to take a majority shareholding in the funeral services company. At that time, BIHL was looking to better returns from investments in associate firms to anchor earnings after a challenging 2012 in which its flagship subsidiary Botswana Life was hard hit. Botswana Life usually contributes over 80% to the group’s income, but was affected by the erosion of household’s disposable incomes.
