UPDATE: Meikles to buy off minorities and delist from ZSE

UPDATE: Meikles to buy off minorities and delist from ZSE

HARARE, March 8 (The Source) – Meikles Limited says it is working on a possible offer to minority shareholders which will result in it subsequently de-listing from the Zimbabwe Stock Exchange (ZSE).

“The Directors of Meikles Limited wish to advise shareholders that the Company is currently engaged in discussions on a transaction that may have material impact on the value of the Company’s shares”.

“The transaction relates to a possible offer to minorities and subsequent delisting of the Company from the Zimbabwe Stock Exchange in line with section 9 of the Zimbabwe Stock Exchange Listing requirements,” said company secretary Thabani Mpofu.

Meikles last year indicated that it had obtained approval from the ZSE to delay publishing its full-year  financials for 2016 due to delays in verifying a debt it is owed by government.

The company, however, said turnover for the year to March 2016 was 10 percent up on the previous year and with the exception of the hospitality unit, all segments of the group contributed to the increase.

The total group turnover for the year was $454 million. Operating income increased by 14 percent while Earnings Before Income Tax Depreciation and Amortisation (EBITDA) increased by $11.5 million relative to the previous year.

In the 2015 financial year, the company reported an operating loss of $10.4 million.


Searching for better value?

Analysts say the decision to delists is most probably driven by the need to search for a better value elsewhere since the company has failed to realise value on the local bourse.

Meikles used to be among the giants on the ZSE but has since lost value.

A spat with the ZSE over the bourse’s decision to temporarily suspend the company’s shares  from trading on the local bourse in February 2015 with regards to the RBZ debt could also be a reason, analysts add.

However, analysts said the company has  to make a higher offer to minority for the decision to  pass at the next AGM , since the major shareholder who have initiated the transaction is not allowed to vote for the motion.  

Major shareholders of Meikles include Gondor Capital investment, Old Mutual Assurance and Clayway Investments which hold 47,42 percent, 6,89 percent and 5,05 percent respectively.