Barclays-Absa deal gets go-ahead from court

JOHANNESBURG – A South African judge yesterday approved a multi-billion-rand deal for Britain’s Barclays bank to buy a majority stake in peer Absa after throwing out a challenge from an apartheid reparations group.

“I am satisfied that a proper case has been made out,” Judge Mohamed Jajbhay of the Johannesburg high court told lawyers representing South Africa’s largest retail bank. “The scheme of arrangement…is hereby sanctioned without any modification,” he ruled.The high court’s approval of the transaction allowed Barclays to clear the last hurdle in the way of the offer to buy a controlling stake in Absa in what would be the biggest single foreign investment in South African since the end of apartheid in 1994.The takeover bid ran into a snag when the human rights lobby Jubilee South Africa argued in court that Barclays should not be allowed to return to South Africa until it offered reparations to apartheid victims.”I am unable to come to their assistance,” Jajbhay said in rejecting the application to halt the deal.The judge said his ruling was based on the fact that Jubilee and veteran anti-apartheid activist Dennis Brutus brought the application at the “eleventh hour”, long after it had been put out for discussion to the public.”Parties who had adequate time to intervene brought it to the court at the last moment without an explanation for such a delay,” the judge said.He added that Jubilee could not show how its rights would be directly affected by the transaction.Instead, the judge said Absa and its employees would suffer “significant prejudice” if the deal was to be delayed.Shareholders would not be able to trade shares, while the judge said it “may” have an adverse effect on the local currency, the rand, which was trading at around 6,75 to the US dollar yesterday morning.Barclays, which left South Africa in 1986 under pressure from anti-apartheid activists, launched its takeover bid on May 9, offering 33 billion rand for a 60 per cent stake in Absa.Barclays had by June 21 snapped up 51,5 per cent of Absa shares – below the 56,5 per cent required under the terms of the transaction.The South African government has endorsed the Barclays takeover of Absa, describing it as a show of confidence from international investors in the future of the country.An Absa spokesman told AFP that they were “delighted” that the deal was going ahead.”We are delighted of course.It’s time to move forward to get the deal done,” Errol Smith told AFP, saying that the bank expected the transaction to be finalised by July 27.Brutus told AFP outside court that he planned to lodge an appeal with the constitutional court.Court proceedings were disrupted twice – once by a protester who shouted about the “state of the currency”, while another, engineer Chris Addington, was arrested for contempt of court when he interrupted the proceedings and refused to sit down when ordered to do so by the judge.-Nampa-AFP”The scheme of arrangement…is hereby sanctioned without any modification,” he ruled.The high court’s approval of the transaction allowed Barclays to clear the last hurdle in the way of the offer to buy a controlling stake in Absa in what would be the biggest single foreign investment in South African since the end of apartheid in 1994.The takeover bid ran into a snag when the human rights lobby Jubilee South Africa argued in court that Barclays should not be allowed to return to South Africa until it offered reparations to apartheid victims.”I am unable to come to their assistance,” Jajbhay said in rejecting the application to halt the deal.The judge said his ruling was based on the fact that Jubilee and veteran anti-apartheid activist Dennis Brutus brought the application at the “eleventh hour”, long after it had been put out for discussion to the public.”Parties who had adequate time to intervene brought it to the court at the last moment without an explanation for such a delay,” the judge said.He added that Jubilee could not show how its rights would be directly affected by the transaction.Instead, the judge said Absa and its employees would suffer “significant prejudice” if the deal was to be delayed.Shareholders would not be able to trade shares, while the judge said it “may” have an adverse effect on the local currency, the rand, which was trading at around 6,75 to the US dollar yesterday morning.Barclays, which left South Africa in 1986 under pressure from anti-apartheid activists, launched its takeover bid on May 9, offering 33 billion rand for a 60 per cent stake in Absa.Barclays had by June 21 snapped up 51,5 per cent of Absa shares – below the 56,5 per cent required under the terms of the transaction.The South African government has endorsed the Barclays takeover of Absa, describing it as a show of confidence from international investors in the future of the country.An Absa spokesman told AFP that they were “delighted” that the deal was going ahead.”We are delighted of course.It’s time to move forward to get the deal done,” Errol Smith told AFP, saying that the bank expected the transaction to be finalised by July 27.Brutus told AFP outside court that he planned to lodge an appeal with the constitutional court.Court proceedings were disrupted twice – once by a protester who shouted about the “state of the currency”, while another, engineer Chris Addington, was arrested for contempt of court when he interrupted the proceedings and refused to sit down when ordered to do so by the judge.-Nampa-AFP