Barclays Bank Plc has sold 103.6 million ordinary shares in Barclays Africa Group Limited (BAGL), representing 12.2% its total shares held in the institution as it begins the journey to exit the Africa market.
The first tranche of shares, according to a statement issued by the bank on Thursday, were sold to both existing and new investors, at sh28,169 (R126) each via an accelerated bookbuild placing, generated sh2.9 trillion (ZAR 13.1b).
The development reduces the Barclays Plc’s stake in BAGL from 62.3% to 50.1%, representing 424.7m ordinary shares.
The London-based institution announced in March that it would reduce its 62.3% stake in BAGL operations to a non-controlling, non-consolidated position over the next two or three years.
Although details of the new investors are still sketchy, it was reported by South African media that South Africa's state pension fund, the Public Investment Corporation SOC Limited, bought 1.2% of BAGL shares.
The fund which already had more than 5% stake in the African business acted as a lead investor in the share placing.
It is also reported that the bank’s former chief executive officer Bob Diamond is also eying a share of BAGL.
Diamond is reportedly said to be putting together a bid for Barclays's remaining 50.1% stake in Barclays Africa, with funding lined up from U.S. buyout firm Carlyle Group and other investors including several sovereign-wealth funds.
It is further reported that together with his partners, they plan to combine Barclays Africa with Atlas Mara Ltd., the small African banking group.
A source that is said to be familiar with the situation was quoted by UK’s Guardian Newspaper as saying that consortium of investors has finished raising funding and will bid for the remaining 50.1% share of Barclays Africa, although they are yet to make an offer to Barclays.
Mr. Diamond and his business partner, Ashish J. Thakkar were reportedly in Johannesburg on Wednesday and met with South African regulators and other local stakeholders.
Thakkar is the founder of Ugandan-headquartered Mara Group and Mara Foundation, and he is a co-founder of Atlas Mara, a London-listed African-based bank which he co-founded with Diamond.
A few days after London–based Barclays Plc announced its plans to sell stake in BAGL, local banks such as Kenya Commercial Bank (KCB) also expressed interest to own a share of the institution.
KCB Group chief executive officer Joshua Oigara was for instance quoted saying that the bank was open to opportunities arising from the planned exit of Barclays Plc, adding that consolidation of the industry into fewer, stronger banks was the way to go.
“As KCB, we have always been keen to strengthen what we see in the market and I can assure you we are very much open for business. Whether it is speaking to Barclays or other organisations available,” Oigara was quoted saying.
Impact of Barclays Plc exit
Although BAGL maintained that the exit of its parent company will not affect African operations in anyway, financial analysts earlier predicted that several changes should be expected at the institution’s Africa-wide subsidiaries over the next three years as Barclays pulls out of Africa.
Analysts noted that having new owners for the Barclays Africa business could trigger a rebrand of the bank’s branches across all its African markets.
A source who asked not to be named because of sensitivity of the matte said “rebranding the African businesses could be inevitable if the expected new shareholders decide to do so to promote their own brand/s.”
“Unless there is a special agreement, we may see Barclays Africa subsidiaries rebrand to reflect the new ownership,” the source said.
It is, however, still unclear of whether the new shareholders will do a rebrand.