Omega Ukama 
MEDTECH Holdings’ (MedTech) says it has terminated negotiations to sell some of its assets and the acquisition of a business in a different sector.
The diversified conglomerate announced last year —through a series of cautionary statements — that it was “in discussions to sell certain company net assets including investments in subsidiaries and also for the acquisition of a business in a different sector”.
“Further to the cautionary statement issued by the board on September 5, 2019, shareholders are advised that discussions relating to the sale of certain … company’s net assets and for the acquisition of a business in a different sector have been terminated,” the company said recently.
“Shareholders and the investing public are no longer required to exercise caution when dealing in the shares of the company,” read the statement.
MedTech said the transactions would constitute a “Category 1” transaction under the Securities and Exchange rules.
According to the rules, a “Category 1” transaction is one “where any percentage ratio is 30 percent or more”, of the aggregate market value of all the equity securities of the listed company.
MedTech’s market capitalisation is currently at about $46 million, which would have put the value of the transaction at a minimum of $13 million.
The group is a prominent player in the provision, manufacture and distribution, of a wide range of healthcare and consumer products.
The company’s subsidiaries include S-MART Agencies, Zvemvura Trading and MedTech Food and Beverage.
Up until recently, the group operated Zimbabwe Pharmaceuticals, a Bulawayo-based pharmaceutical manufacturer.
It has since disposed of that business “due to low local demand and business environmental issues”.
Meanwhile, the company’s stock was the biggest gainer on the local bourse in 2019 after putting on 7 500 percent during the year.
Analysts, however, dismissed the stock’s gains as a “penny stock anomaly”.
“The company’s stock has benefited from its low price,” Enock Rukarwa, a research analyst with a leading securities and research firm said recently.
“Penny counters also do not have circuit breakers implying that the price can increase by even 100 percent on a single day unlike blue chip counters where the price increase is within plus or minus 20 percent on a single day,” he added.
MedTech’s shares closed trading on the ZSE at 1,50 cents on Friday.
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