• The offer price is fair and reasonable, says the independent advisor. It is also 65% below what the audited books say the shares are worth
• FMP is set to delist ZSE on 1 July 2026, with majority shareholder First Mutual Holdings offering minority shareholders US$0.033 per share ahead of the proposed termination of listing
• The offer has been declared fair and reasonable by Intellego Investment Consultants, yet it sits at roughly 35% of the audited IFRS fair value NAV per share of US$0.0867
• The transaction is shaped by weak liquidity, a US$17.1 million deferred tax liability, and thin trading history, with only 0.27% and 0.20% of issued shares traded in 2024 and 2025 respectively, leaving minority investors with limited practical exit options

Harare- First Mutual Properties Limited is set to delist from the Zimbabwe Stock Exchange on 1 July 2026, with majority shareholder First Mutual Holdings Limited offering minority shareholders US$0.033 per share to exit ahead of the termination of listing.

The circular, published on 11 May 2026, sets an Extraordinary General Meeting for 2 June 2026 at which shareholders will vote on the voluntary delisting,  a transaction that, if approved, will remove one of Zimbabwe's more established property counters from public markets and transfer it into private hands under the near-total control of its majority owner.

The offer is straightforward in its mechanics. It is considerably less straightforward in what it reveals about the gap between what FMP's assets are worth, what the market has been willing to pay for them, and what minority shareholders are now being asked to accept as fair exit value.

That gap  and the structural reasons behind it  is the real story in this transaction.

The Numbers That Matter

The independent financial advisor, Intellego Investment Consultants, has declared the offer fair and reasonable. Its analysis is thorough and its conclusion defensible. But the valuation table embedded in the fairness opinion deserves more attention than the headline conclusion typically receives.

The audited IFRS fair value of FMP's investment property portfolio as at 31 December 2025 was US$136,078,000, independently determined by a property valuer and carried in the company's audited balance sheet. Applying standard NAV methodology to that figure, deducting liabilities including the deferred tax liability produces an adjusted IFRS fair value NAV per share of approximately US$0.0867. The offer price of US$0.033 represents approximately 35% of that figure, meaning minority shareholders are being offered roughly one third of what the audited books indicate their shares are worth in terms of underlying asset value.

The blended valuation that Intellego applied, combining an income capitalisation approach weighted at 60% with the 30-day volume weighted average price weighted at 40%  produces a base scenario value of US$0.0302 per share, against which the offer price of US$0.033 represents a 9.3% premium.

On that basis, the fairness conclusion holds. But the choice of methodology, and the weights assigned to each component, are doing considerable analytical work that the headline "fair and reasonable" opinion does not fully communicate to the ordinary shareholder reading this circular.

The 60% weight assigned to income capitalisation NAV, rather than the higher IFRS fair value NAV, reflects the central analytical tension in this transaction. FMP's current passing income, audited net property income of US$4,566,700 for 2025  when capitalised at market rates, produces a value meaningfully below what the same properties are valued at on an estimated rental value basis in the IFRS accounts.

The gap between passing income and estimated rental value reflects, in part, a portfolio with a Weighted Average Unexpired Lease Term of only 2.46 years, approximately 33% of which expires within twelve months, and occupancy and rental collection challenges that have compressed actual income below the portfolio's theoretical earning capacity.

The honest reading is that FMP's portfolio is worth considerably more than it is currently earning, but minority shareholders are being offered a price calibrated primarily to what it is earning rather than what it is worth.

The structural complexity that explains much of the discount is the deferred tax liability, US$17,118,906 sitting on FMP's balance sheet, arising almost entirely from investment property revaluation surpluses. This liability is the primary reason FMP, despite owning a portfolio independently valued at US$136 million, trades at and is being offered at what amounts to a deep discount to book value.

Unlike Zimbabwe's listed Real Estate Investment Trusts, Tigere, Revitus, Eagle, and Pfuma which are tax-exempt and trade at premiums to NAV ranging from 1.24 times to 2.14 times, FMP operates as a taxed Real Estate Operating Company. The income tax exemption available to REITs is not available to FMP, and the deferred tax liability represents the crystallised consequence of years of property appreciation that cannot be unlocked without triggering a tax event.

In the base scenario of Intellego's analysis, a 35% probability-weighted discount is applied to the deferred tax liability on the basis that FMHL has indicated its intention to hold the portfolio without near-term disposal meaning the DTL may never fully crystallise in cash terms. That treatment is analytically reasonable, but minority shareholders who do not accept the offer and remain in an unlisted entity have no mechanism to compel FMHL to manage the portfolio in a way that reduces the DTL burden or distributes the embedded value. The deferred tax liability is, for them, a permanent structural overhang on the value of their investment.

The fairness opinion acknowledges this directly, noting that the DTL "will persist for as long as the underlying properties remain unrealised." For shareholders who stay in after delisting, that is not an abstraction, but it is a permanent feature of the entity they will be invested in, without the ability to sell freely.

The Liquidity Reality That Preceded This Offer

One of the more analytically useful disclosures in this circular concerns FMP's trading history on the ZSE, and it provides important context for understanding why the offer price, while below IFRS NAV, is being described as reasonable.

Only approximately 0.27%  and 0.20% of FMP's issued share capital were traded during 2024 and 2025 respectively. In practical terms, this means FMP has been a listed company in name only for several years, carrying all the costs and obligations of public listing while offering its minority shareholders almost no ability to trade their way out of the investment at anything resembling fair value. The market had already, in effect, stranded minority shareholders long before the formal delisting proposal arrived.

The January 2026 trading data makes this more vivid. A single block trade of 78,623,000 shares on 30 January 2026, representing approximately 62% of the entire 30-day trading volume transferred at a below-spot price and distorted the VWAP that the offer price was then pitched modestly above. When Intellego strips out that block trade, the adjusted VWAP sits at approximately US$0.0317, producing an offer premium of only 4.1% on an ex-block basis. The offer is priced above a very thin and partially distorted market. The reasonableness conclusion rests partly on the recognition that the market being priced above is barely a market at all.

Who Controls This Outcome

The vote mechanics at the EGM introduce a dimension that shareholders should understand clearly. To pass, Special Resolution 1, the delisting resolution, requires at least 75% of votes cast by shareholders present or represented at the EGM, excluding the controlling shareholder, its associates, and any party acting in concert.

FMHL, as the majority shareholder at 70.80%, cannot vote on the delisting resolution. Its stake is excluded from the denominator for this purpose. Critically, CBZ Holdings Datvest, which holds 16.87%  of FMP's issued shares but is identified in the circular as a major shareholder of FMHL and therefore an associate of the controlling shareholder, is also precluded from voting on Special Resolution 1.

Once those two shareholdings are excluded, the effective voting universe contracts significantly. The remaining meaningful shareholders include LHG Malta Holdings at 6.38% and TN Asset Management Nominees at 1.83%, alongside smaller institutional and retail holders. The minority vote that will determine whether FMP delists is concentrated in a relatively small pool of shareholders who have historically shown limited engagement with the counter.

A 75% threshold among an already thin and passive shareholder base is achievable, but it is not a foregone conclusion, and the identity and position of LHG Malta Holdings Limited in particular could be decisive.

The circular's treatment of what happens to shareholders who neither accept the offer nor vote for delisting but lose the vote is worth examining carefully. Such shareholders will find themselves invested in an unlisted public company expected to trade on an over-the-counter platform described in the circular's own independent fairness opinion as offering "extremely thin liquidity, limited price discovery, and practical inaccessibility for institutional investors with mandates requiring listed securities."

The circular commits to maintaining governance standards, continuing financial reporting, and providing audited annual accounts and interim results post-delisting. These are meaningful protections relative to the complete opacity that sometimes characterises delistings in less regulated jurisdictions. Shareholders who remain will have legal rights but limited practical exit options, at prices determined not by a regulated exchange but by whatever counterparties can be found in an OTC market.

The OTC mechanism is described as contingent, its implementation will be determined by the actual number of shares and shareholders remaining after the offer closes. If most minority shareholders accept the offer, the OTC market may never develop sufficient depth to provide meaningful liquidity for those who do not.

The rationale offered for the delisting, greater flexibility to raise capital through private placements, asset-level financing, and development joint ventures; more efficient corporate actions; better tax structuring  is plausible on its face. Property companies globally have found public market listing increasingly difficult to justify when the cost of compliance exceeds the value of capital markets access, particularly for portfolios of the size FMP manages.

However, the underlying logic of this transaction is simpler and should be stated plainly. FMHL, which already owns 70.80% of FMP, wants to own it entirely, or as close to entirely as the offer achieves. The delisting removes the disclosure obligations, governance constraints, and minority shareholder protections that come with public listing.

The price at which it is doing so, 3.3 cents per share, one third of audited NAV, reflects the structural reality of a counter that the market never adequately priced, a deferred tax liability that permanently suppresses equity value, and a liquidity environment so thin that minority shareholders have had no practical alternative for years.

The independent advisor's fairness conclusion is technically defensible. The offer is above the blended value in two of three scenarios, above the 30-day VWAP, and accompanied by an underwritten exit that guarantees certainty of settlement. For a shareholder who has been unable to trade their FMP position for years and now faces the prospect of indefinite illiquidity in an unlisted entity, 3.3 cents in cash is a rational exit.

The closing date for accepting the offer is 24 June 2026. After that, the options narrow considerably.

Equity Axis News