Atlas, Carlyle Brew Barclays Africa Bid -- WSJ
April 25 2016 - 3:02AM
Dow Jones News
Investment vehicle run by Bob Diamond plans joint offer with
U.S. buyout firm
By Matina Stevis
NAIROBI, Kenya -- Bob Diamond's investment vehicle Atlas
Merchant Capital has teamed up with major U.S. buyout firm Carlyle
Group to put together a bid for Barclays PLC's stake in Barclays
Africa Group, two people familiar with the situation said
Sunday.
Mr. Diamond, who served as chief executive of Barclays PLC and
resigned amid the Libor scandal, will use New York-based Atlas
Merchant Capital to jointly fundraise with Carlyle, the people
said.
Mr. Diamond -- tipped by analysts as a leading candidate to buy
his former bank's African business since Barclays confirmed it was
for sale last month -- and Carlyle haven't yet submitted a formal
offer, the people familiar with the situation said. The timeline
for a deal is uncertain given that Mr. Diamond and Carlyle have
recently agreed to partner on this bid, and Barclays said in March
that it would give any sale two to three years to materialize and
wouldn't rush into a fire sale.
A spokesman for Barclays PLC refused to comment. Carlyle Group
and Mr. Diamond didn't immediately respond to calls for
comment.
Atlas Mara, Mr. Diamond's African banking group which he co-owns
with entrepreneur Ashish J. Thakkar, won't be making a bid for
Barclays Africa Group because its market capitalization at London's
AIM index, at roughly $300 million, prohibits it from bidding for
such a large entity, a person familiar with the situation said.
Barclays PLC owns 62.3% in Barclays Africa Group and last month
announced it would seek to sell down most of that for regulatory
reasons. U.K. banking regulations are making it increasingly
burdensome for large banks to own assets in multiple jurisdictions
and Barclays' sale of the African unit will cut the rising costs of
complying with this regulation, the bank said when it announced its
plans last month. The Wall Street Journal reported news of the move
in January.
Analysts estimate the bank will need to sell a stake worth
roughly $3 billion, making it a massive banking asset for the
African market.
Barclays Africa Group owns 12 banks across Africa, the biggest
of which by far is South Africa-based Absa, one of the country's
largest lenders. With South Africa's economy slowing down to a
near-halt and many key economies on the continent suffering the
fallout of low oil prices and diminished Chinese demand for
industrial minerals, analysts have questioned the attractiveness of
buying the entire group.
And at a roughly $3 billion valuation, it wasn't clear which
single entity would be able to get the cash together to seal a
deal.
After Barclays PLC announced it would have to sell the majority
of its stake in the African lending group, several local and
foreign banks expressed interest in buying single entities within
the Barclays Africa Group. Barclays Kenya, for example, attracted
open interest from several Kenyan banks who said, if the lender was
split away from its family, they would bid for it.
Barclays Africa Group chief executive Maria Ramos, in an
interview with The Wall Street Journal in March, said she wasn't
prepared to see the group broken up and sold off parts. The mother
company, Barlcays PLC in London, would also prefer the whole chunk
to be sold together.
Mr. Diamond and Carlyle Group aim to put together a bid to
acquire Barclays PLCs share in Barclays Africa Group, not just
component parts of it, the people familiar with the matter
said.
Write to Matina Stevis at matina.stevis@wsj.com
(END) Dow Jones Newswires
April 25, 2016 02:47 ET (06:47 GMT)
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