Barclays secures Absa, holds 54 per cent

JOHANNESBURG – Britain’s Barclays Plc has acquired 53,96 per cent of South Africa’s biggest consumer bank Absa for around 27,9 billion rand, the groups said on Monday.

The transaction will be settled tomorrow and three Barclays executives will join the Absa board effective from that day. Barclays spokeswoman Liz Hooper said the group was confident it could reach its target of holding a 56,5 per cent stake in the South African banking group by the end of the year.This means that the British group would retain a controlling stake in Absa when preference shares – giving a black investor group a 10 per cent stake in a black economic empowerment deal (BEE) – vests in a couple of years’ time.Hooper said Barclays aimed to prevent any material impact on the foreign exchange market when it makes its payment.”We’ve had extensive discussions with authorities on how we will fund the transaction.We need to ensure that we maintain an orderly market while we do that.To carry out the funding in a way which is designed to avoid any material dislocation in the forex markets,” Hooper said.She did not give further details on the funding of the deal.The transaction will mark the return of Barclays to retail banking in South Africa after an absence of 18 years and is the biggest foreign direct investment in the country yet.Barclays said in addition to a 32 per cent stake it had acquired in the first part of its bid to take control of Absa, shareholders had sold a further 19,97 per cent.Purchases of Absa shares in the market had further pushed its holding to 53,96 per cent.An Absa spokesman said the value of the transaction was 27,9 billion rand, down from Barclays’ original valuation of the deal at about 33 billion rand.Barclays’ second offer was aimed at buying a 28 per cent stake in Absa to meet its original target of holding a 60 per cent stake but several big institutional shareholders refused to sell, believing the South African banking group’s share price had much further to go.Yesterday Absa’s shares opened at 90,50 rand; 9,7 per cent above the Barclays offer price of 82,50 rand per share.By 0952 GMT, the stock was 0,55 per cent down at 90,00 rand; in line with the JSE Securities Exchange’s banking sector.Absa is South Africa’s biggest retail bank with 31 600 employees, 2 000 temporary employees, 670 outlets, seven million customers and more than 5 100 automated teller machines (ATMs).It has the country’s biggest Internet banking base.- Nampa-ReutersBarclays spokeswoman Liz Hooper said the group was confident it could reach its target of holding a 56,5 per cent stake in the South African banking group by the end of the year.This means that the British group would retain a controlling stake in Absa when preference shares – giving a black investor group a 10 per cent stake in a black economic empowerment deal (BEE) – vests in a couple of years’ time.Hooper said Barclays aimed to prevent any material impact on the foreign exchange market when it makes its payment.”We’ve had extensive discussions with authorities on how we will fund the transaction.We need to ensure that we maintain an orderly market while we do that.To carry out the funding in a way which is designed to avoid any material dislocation in the forex markets,” Hooper said.She did not give further details on the funding of the deal.The transaction will mark the return of Barclays to retail banking in South Africa after an absence of 18 years and is the biggest foreign direct investment in the country yet.Barclays said in addition to a 32 per cent stake it had acquired in the first part of its bid to take control of Absa, shareholders had sold a further 19,97 per cent.Purchases of Absa shares in the market had further pushed its holding to 53,96 per cent.An Absa spokesman said the value of the transaction was 27,9 billion rand, down from Barclays’ original valuation of the deal at about 33 billion rand.Barclays’ second offer was aimed at buying a 28 per cent stake in Absa to meet its original target of holding a 60 per cent stake but several big institutional shareholders refused to sell, believing the South African banking group’s share price had much further to go.Yesterday Absa’s shares opened at 90,50 rand; 9,7 per cent above the Barclays offer price of 82,50 rand per share.By 0952 GMT, the stock was 0,55 per cent down at 90,00 rand; in line with the JSE Securities Exchange’s banking sector.Absa is South Africa’s biggest retail bank with 31 600 employees, 2 000 temporary employees, 670 outlets, seven million customers and more than 5 100 automated teller machines (ATMs).It has the country’s biggest Internet banking base.- Nampa-Reuters