As the bidding war for Barclays’s 50.1% stake in Barclays Africa Group hots up‚ it has emerged that an empowerment deal is likely to be part of the equation.
A staff share scheme could be on the cards too‚ depending on the buyer.
Barclays Africa chairwoman Wendy Lucas-Bull told shareholders at its annual meeting on Tuesday that the disposal of some or all of Barclays plc’s stake in its South African subsidiary presented an opportunity to increase the empowerment shareholding.
“This is one of the options we have tabled with (Barcla
ys) plc. We are collaborating with them to look at a broad range of options.”
Barclays plc is reducing its 62.3% stake in its SA-based subsidiary. That stake has since fallen to 50.1%‚ following a successful bookbuild earlier this month in which 12.2% of the group’s shares were placed with investors.
The one potential buyer that has confirmed interest is a consortium comprising former Barclays plc CEO Bob Diamond’s Atlas Merchant Capital‚ African billionaire Ashish Thakkar’s Mara Capital and private equity giant Carlyle. It is understood that the consortium plans to include a black economic empowerment (BEE) project in its bid and to offer staff shares.
The new financial services company set up by African Rainbow Minerals chairman Patrice Motsepe and former Sanlam chief executive Johan van Zyl has also expressed interest in buying into Barclays Africa‚ and there have been reports that Dubai-based Abraaj Group is looking to make an offer.
On Tuesday an official representing the Eskom and Sentinel Retirement Funds said the funds would like to see 10% or more of Barclays Africa go to a broad-based black economic empowerment grouping if the opportunity arose.
“It would be very exciting if a black group could step up and make it a black-owned bank”‚ said Mehlubi Mncube‚ of Sentinel Retirement Fund.
Barclays Africa has not had a black empowerment shareholding of any significance since former Mvelaphanda chairman Tokyo Sexwale’s Batho Bonke Capital sold out of its holding in 2012.
Diamond and Thakkar were in Johannesburg last week‚ and are known to have met with regulators.
They have emphasised their bid is fully funded with permanent capital and they are expected to use a listed vehicle in an effort to allay Reserve Bank concerns about private equity players owning significant stakes in SA’s banks. While they made it clear last month that they were interested in the whole of the stake‚ it is not clear how much of the stake will be for sale – nor what kind of deal regulators in the UK and SA will agree to.
SA’s finance minister has to agree to any deal‚ or deals‚ that takes Barclays plc’s stake below 50%‚ in terms of the agreement that was reached between Barclays and SA’s regulators at the time the UK group bought into Absa in 2006.
Barclays plc has said it wants to sell its stake down to the level at which it can deconsolidate Barclays Africa for accounting and regulatory purposes – below 20% – but there is little precedent for such a disposal and the UK’s Prudential Regulatory Authority is expected to look at more than just the shareholding before it allows deconsolidation and lifts the capital requirements behind the group’s decision to sell.
“We’re not clear how far plc will sell down. They have indicated they would prefer to still have a significant shareholding but we’re proceeding based on the worst case that plc goes to zero‚” Lucas-Bull said.
But she said there were synergies between the UK and South African groups‚ particularly in the corporate and investment bank space.
Barclays Africa chief executive Maria Ramos said there were arms length contracts between the groups on information technology‚ back office processes and branding and they were working to ensure there would be no effect on service as a result of the sell-down. Nor had staff morale been affected: “The feedback we’re getting is people are excited.”
Lucas-Bull was challenged at the meeting on Tuesday on whether she and her board monitored attendance at board meetings by independent directors with one – Yolanda Cuba – singled out for poor attendance by shareholders. There was a 12% vote against her re-election as a director though she was still re-elected. — BDLive
Bank empowerment deal likely
A staff share scheme could be on the cards too‚ depending on the buyer.
Barclays Africa chairwoman Wendy Lucas-Bull told shareholders at its annual meeting on Tuesday that the disposal of some or all of Barclays plc’s stake in its South African subsidiary presented an opportunity to increase the empowerment shareholding.
“This is one of the options we have tabled with (Barcla
ys) plc. We are collaborating with them to look at a broad range of options.”
Barclays plc is reducing its 62.3% stake in its SA-based subsidiary. That stake has since fallen to 50.1%‚ following a successful bookbuild earlier this month in which 12.2% of the group’s shares were placed with investors.
The one potential buyer that has confirmed interest is a consortium comprising former Barclays plc CEO Bob Diamond’s Atlas Merchant Capital‚ African billionaire Ashish Thakkar’s Mara Capital and private equity giant Carlyle. It is understood that the consortium plans to include a black economic empowerment (BEE) project in its bid and to offer staff shares.
The new financial services company set up by African Rainbow Minerals chairman Patrice Motsepe and former Sanlam chief executive Johan van Zyl has also expressed interest in buying into Barclays Africa‚ and there have been reports that Dubai-based Abraaj Group is looking to make an offer.
On Tuesday an official representing the Eskom and Sentinel Retirement Funds said the funds would like to see 10% or more of Barclays Africa go to a broad-based black economic empowerment grouping if the opportunity arose.
“It would be very exciting if a black group could step up and make it a black-owned bank”‚ said Mehlubi Mncube‚ of Sentinel Retirement Fund.
Barclays Africa has not had a black empowerment shareholding of any significance since former Mvelaphanda chairman Tokyo Sexwale’s Batho Bonke Capital sold out of its holding in 2012.
Diamond and Thakkar were in Johannesburg last week‚ and are known to have met with regulators.
They have emphasised their bid is fully funded with permanent capital and they are expected to use a listed vehicle in an effort to allay Reserve Bank concerns about private equity players owning significant stakes in SA’s banks. While they made it clear last month that they were interested in the whole of the stake‚ it is not clear how much of the stake will be for sale – nor what kind of deal regulators in the UK and SA will agree to.
SA’s finance minister has to agree to any deal‚ or deals‚ that takes Barclays plc’s stake below 50%‚ in terms of the agreement that was reached between Barclays and SA’s regulators at the time the UK group bought into Absa in 2006.
Barclays plc has said it wants to sell its stake down to the level at which it can deconsolidate Barclays Africa for accounting and regulatory purposes – below 20% – but there is little precedent for such a disposal and the UK’s Prudential Regulatory Authority is expected to look at more than just the shareholding before it allows deconsolidation and lifts the capital requirements behind the group’s decision to sell.
“We’re not clear how far plc will sell down. They have indicated they would prefer to still have a significant shareholding but we’re proceeding based on the worst case that plc goes to zero‚” Lucas-Bull said.
But she said there were synergies between the UK and South African groups‚ particularly in the corporate and investment bank space.
Barclays Africa chief executive Maria Ramos said there were arms length contracts between the groups on information technology‚ back office processes and branding and they were working to ensure there would be no effect on service as a result of the sell-down. Nor had staff morale been affected: “The feedback we’re getting is people are excited.”
Lucas-Bull was challenged at the meeting on Tuesday on whether she and her board monitored attendance at board meetings by independent directors with one – Yolanda Cuba – singled out for poor attendance by shareholders. There was a 12% vote against her re-election as a director though she was still re-elected. — BDLive
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