UK-BASED Barclays, majority shareholder of Absa in South Africa, will pay in the vicinity of N$1,3 billion for the 49,9 per cent stake it wants to buy in Bank Windhoek.
This will one of the biggest foreign direct investment coming Namibia’s way in recent years.The Deputy Governor of the Bank of Namibia (BoN), Ebson Uanguta, yesterday afternoon said the central bank has given a conditional go-ahead for Barclays to acquire 49,9 per cent of the shares in Capricorn Investment Holdings (CIH), the holding company of Bank Windhoek. This will give Barclays an indirect stake of 49,9 per cent in Bank Windhoek, to date the only wholly owned Namibian bank in the country.Uanguta said Absa last month asked the BoN for approval to buy a 49,9 per cent shareholding in CIH. By May 31, the BoN gave permission that Barclays, not Absa, could buy the shares.This is not the first time Absa has tried to buy into Bank Windhoek. In 2010, the BoN refused to allow Absa to buy at least 70 per cent of the shares in CIH, a transaction rumoured to have been worth around N$1,5 billion at the time.BoN Governor Ipumbu Shiimi shot Absa’s application down then, saying the merger would have pushed up foreign shareholding in the local banking sector up from 65 per cent to nearly 80 per cent. This was not in line with ‘national developmental objectives’, Shiimi said at the time.Uanguta yesterday said the BoN viewed the latest application ‘favourable as it ensures that the majority indirect ownership in Bank Windhoek (50,1 per cent) will remain in the hands of Namibian nationals’.He said the BoN didn’t approve Absa buying the shares, as it wanted to protect the local banking sector against ‘single-country exposure’. Shiimi raised the same issue back in 2010, saying Absa as a South African bank could have rendered the local system more susceptible to cross-border shocks through the risk of contagion.Barclays, on the other hand, is a major global financial services provider with a history of 300 years in banking in 50 countries around the world. In Africa alone, it has banks in 15 countries which made 177 million pounds profit in the first quarter of 2012.Uanguta said the deal is subject to two conditions. Firstly, the Barclays Group, and no other entity, must hold the shares in Bank Windhoek. Secondly, Bank Windhoek must lists its 50,1 per cent stake on the Namibian Stock Exchange (NSX) to broaden ownership. This could take between 18 to 24 months, he said.CIH group company secretary Hellmut von Ludwiger yesterday afternoon issued a statement paving the way forward. He said CIH will now consult with its shareholders, board of directors and other stakeholders to get their support.In the meantime, CIH and Barclays will start negotiating about an offer. Barclays will also embark on a due diligence review, and the two parties will seek approval from all the necessary regulators.Uanguta said locally, the merger would be subject to approval from the Namibia Competition Commission (NaCC), but that the BoN doesn’t foresee any problems with that.Analysts estimate the deal to be worth around N$1,3 billion. Looking at Bank Windhoek’s financials, Simonis Storm Securities analyst Romé Mostert said the bank’s market value is about N$2,2 billion, and that 49,9 per cent of its shares is worth about N$1,3 billion.Mostert said Barclays would be keen to get a foot in the door at Bank Windhoek in order to expand its African footprint.
