eBusiness Weekly
Happiness Zengeni and Tinashe Makichi
Dubai-based investor Ali Albwardy offered only $35 million for Zimbabwe Stock Exchange listed Meikles Limited but there are discussions still taking place around specific individual units after talks for the takeover of the whole group collapsed.
Well-placed sources told Business Weekly that talks between Meikles and Albwardy over the takeover of the group collapsed after negotiations broke down on valuation differences after he offered to pay $35 million.
The transaction was expected to subsequently result in the delisting of Meikles, which also has interest in mining.
The ZSE currently values Meikles at $44.17 million at a share price of 18c (based on Thursday’s closing price.) The net asset value per share stands at 44.1c.
However, Albwardy is now eyeing just the group’s hotels and its agricultural unit, Tanganda. If the discussions around the units are successful, the retail arm will be unbundled and will continue operating as a partnership with South African retailer Pick ‘n’ Pay.
“John Moxon (Meikles Limited executive chairman) could not reach an agreement with the Arab investor over the pricing and from the look of things it is evident that the investor either did not have the money or was just not willing to meet the valuation.
“But negotiations for the takeover of Tanganda and the hotels unit are still on,” said the source.
According to information at hand, the deal was engineered by a key Albwardy official who is Mutare-born and therefore naturally, Tanganda was always the main draw card.
However, some Meikles minority shareholders were already questioning the credibility of Ali Albwardy and his wealth and the transaction as a whole.
Controversial businessman and Meikles Limited minority shareholder Nicholas Van Hoogstraten told this publication that results of his independent investigations could not find evidence of Albwardy’s business empire.
“From what I have gathered so far, it looks like Ali Albwardy is not the investor that Meikles Limited needs at the moment and investigations that I have made so far point to the fact that financial institutions and some of my contacts in the Middle East are not aware of Albwardy,” said Mr Van Hoogstraten.
This is despite the fact that Albwardy is linked to popular retail chains Spinneys and Waitrose.
Another shareholder Eddie Cross continues to push an audit into a South African investment before the group can change shareholders.
Analysts say that the even though discussions are ongoing, it was unlikely that Mr Moxon would sell the group given his statement that the Meikles family was after investors who would inject capital rather than dismantle it.
At the Meikles annual general meeting held recently, Mr Moxon said “the final position should set the company on a firm path as ultimately the family does not want to dismantle the group but to inject funding”
The case for unbundling has however been long argued by analysts. A recent report from an email-based service noted that: “Supermarkets and agriculture are the most attractive and this is where we believe the group should mostly focus.
Meikles in the long run is better of split into separate entities as a way of creating value for shareholders. We can get four good companies out of the group.”Meikles has been in existence since 1892 after the Meikle brothers comprising Tom, Stewart and Jack expanded their transport business into the then Southern Rhodesia.
“Because of the rich history, it’s really hard for John (Moxon) to relinquish control of his grandfather’s company.
But the dilemma is on continuity seeing that he is past retirement age and that his sons may not be keen on taking up businesses in Zimbabwe.
He still has to convince his family that they can hand over the business to outsiders and that’s a very difficult decision,” said market analyst Fiona Chigwida.
Efforts to get a comment from Meikles Limited were fruitless.
