FirstRand up on Citigroup takeover talk

JOHANNESBURG – Shares in South Africa’s FirstRand jumped by as much as 3,3 per cent after a newspaper said yesterday that US bank Citigroup was likely to buy FirstRand unit, First National Bank (FNB).

The bank’s shares stood three per cent higher at 14,66 rand by 0805 GMT. “It’s all this talk on the takeover.The banks have been strong but FirstRand has been rising to a greater extent and this talk is pushing the share,” Kevin Barlow-Jones at Afrifocus Securities said.Business Day said Citigroup, the world’s biggest bank, was the next possible foreign bank to buy a South African bank, with FNB – the country’s second-biggest bank by assets – its likely target.The paper quoted London-based analysts saying they expected Citigroup’s massive buying power and presence in other emerging markets to help its chances of capturing FNB.The paper said it did not expect an announcement of a possible takeover until the fourth quarter of the year.Citigroup visited South Africa banks last year, the paper said.Rumours that British bank Standard Chartered Plc had also been talking to the banks and Barclays Plc’s subsequent acquisition of Absa had cooled speculation that Citigroup was keen to buy a local bank.The newspaper said Citigroup had declined to comment.FirstRand said the bank’s position had not changed, which is that it is open to talks with foreign banks as it has said before in comments made to shareholders.”We have said in the past that we are keeping an open mind about talking to a foreign bank, but we are not confirming that we have talked to anybody in particular,” FirstRand’s director of investor relations Sam Moss told Reuters.An unnamed analyst quoted by the paper said any deal would have to be structured on the same basis as the Barclays-Absa deal, where the British bank was not allowed to buy 100 per cent of Absa and the South African bank had to retain its listing.The country’s biggest consumer bank Absa has agreed to sell a 60 per cent controlling stake to Barclays.-Nampa-Reuters”It’s all this talk on the takeover.The banks have been strong but FirstRand has been rising to a greater extent and this talk is pushing the share,” Kevin Barlow-Jones at Afrifocus Securities said.Business Day said Citigroup, the world’s biggest bank, was the next possible foreign bank to buy a South African bank, with FNB – the country’s second-biggest bank by assets – its likely target.The paper quoted London-based analysts saying they expected Citigroup’s massive buying power and presence in other emerging markets to help its chances of capturing FNB.The paper said it did not expect an announcement of a possible takeover until the fourth quarter of the year.Citigroup visited South Africa banks last year, the paper said.Rumours that British bank Standard Chartered Plc had also been talking to the banks and Barclays Plc’s subsequent acquisition of Absa had cooled speculation that Citigroup was keen to buy a local bank.The newspaper said Citigroup had declined to comment.FirstRand said the bank’s position had not changed, which is that it is open to talks with foreign banks as it has said before in comments made to shareholders.”We have said in the past that we are keeping an open mind about talking to a foreign bank, but we are not confirming that we have talked to anybody in particular,” FirstRand’s director of investor relations Sam Moss told Reuters.An unnamed analyst quoted by the paper said any deal would have to be structured on the same basis as the Barclays-Absa deal, where the British bank was not allowed to buy 100 per cent of Absa and the South African bank had to retain its listing.The country’s biggest consumer bank Absa has agreed to sell a 60 per cent controlling stake to Barclays.-Nampa-Reuters