BCS Barclays PLC

By Ian Walker 

LONDON-- Bob Diamond's Atlas Mara Ltd. on Tuesday said it could combine with Barclays Africa if a consortium considering buying the African arm of Barclays PLC succeeds.

The potential purchase would turn Africa banking group Atlas Mara into a major brand in South Africa and more than a dozen other countries, and revive its prospects after a rocky two years that saw its share price halve.

Atlas Mara said the combination of Atlas Mara with the much larger Barclays Africa would be backed by investors including investment companies of its co-founders, Mr. Diamond's Atlas Merchant Capital and Ashish Thakkar's Mara Group. The Wall Street Journal and other media reported Sunday that Atlas Merchant Capital had teamed up with U.S. buyout firm Carlyle Group to put together a bid for Barclays Africa.

Mr. Diamond and Mr. Thakkar co-founded Atlas Mara in 2013 to raise shares on the London Stock Exchange and build a sub-Saharan Africa bank. Backed by U.S. shareholders, Atlas Mara bought assets in countries including Nigeria, Zambia and Rwanda, but struggled to gain traction as investors soured on emerging markets and its shares sank. Atlas Mara's assets are around $2.4 billion, compared with Barclays Africa's $75 billion in assets.

Meanwhile, Mr. Diamond's other main vehicle, Atlas Merchant Capital, has been looking for purchases after raising around $260 million, but its focus has been on developed markets. Mr. Diamond is a former chief executive of Barclays and helped lead the British bank's push into Africa in the 2000s. He left Barclays in 2012 after the bank entered a settlement over alleged interest rate rigging.

Barclays last month announced it would sell its 62.3% stake in Barclays Africa, after deciding it didn't fit its strategy and burned up too much capital. Barclays Africa owns 12 banks across Africa, the biggest of which by far is South Africa-based Absa, one of the country's largest lenders.

Atlas Mara appeared to be a natural purchaser, but it was hard to see how it could raise billions of dollars when its market cap is less than $300 million.

Mr. Thakkar, a 34-year-old England-born Ugandan who sometimes advises African heads of state, and Mr. Diamond, the 64-year-old American who became the face of Britain's post-financial crisis banking scandals, set up Atlas Mara shortly after meeting at a dinner party in 2013. Mr. Diamond and Mr. Thakkar, both Atlas Mara directors, won't be part of any potential talks with Atlas Mara about a merger, Atlas Mara said.

Atlas Mara shares rose 11%, to 455 pence. Barclays Africa shares were unchanged.

Write to Ian Walker at ian.walker@wsj.com

(END) Dow Jones Newswires

April 26, 2016 04:59 ET (08:59 GMT)

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