Barclays sale whets Robert Diamond’s appetite for Africa
- Can Diamond raise P22 billion for Barclays stake?
- BancABC and Barclays in the same stable?
Former Barclays plc Chief Executive Officer, Robert Diamond who is also known as Rob Diamond, is reportedly preparing to make a bid for the 62 percent stake that Barclays Africa is selling.
“This is time, we would like to accelerate our investing in Africa and not pull back,” Diamond was quoted as saying last week.
Last week Tuesday, the majority shareholder of Barclays Bank Botswana Limited, Barclays Africa Group Limited (BAGL) and Barclays Bank PLC (Barclays PLC) announced that Barclays PLC will reduce its shareholding of 62.3 percent in BAGL in a period of two to three years.
However, the proposed reduction of Barclays PLC shareholding in BAGL will not result in a change of ownership in Barclays Bank Botswana Limited, with BAGL remaining the majority shareholder.
The non-South African assets that Diamond is looking to acquire are worth over P22 billion ($2 billion), something of a tall order for a firm with a P3,5 billion ($330 million) market capitalization.
This helps explain why Diamond is looking to tap into other funding sources, with sovereign wealth funds in Asia and the Middle East among them.
Diamond’s foray into Africa kicked off with his group Atlas Mara’s takeover of BancABC, which delisted from both the Botswana Stock Exchange and Zimbabwe Stock Exchange, and listed on the London Stock Exchange. BancABC also has subsidiaries in Mozambique, Tanzania, Zambia and Zimbabwe.
Diamond will however, have to compete with South Africa’s state-run Public Investment Corporation (PIC), which manages the country’s $60 billion public pension fund, and has stated a clear intention to increase its 5,4 percent stake in BAGL. China originating Industrial and Commercial Bank of China is also said to be a contender.
Some pundits, however, are said to be dismissing Diamond’s chances due to his unceremonious exit from CEO position at Barclays.
Questions abound as to whether any single bidder can afford the large stake that is Barclays Africa Group Limited.
Barclays has been in Africa since 1925. Barclays Africa was created three years ago under a deal in which the British bank handed over ownership of its businesses in eight African countries to its South African subsidiary in exchange for a 62.3 percent stake in the new entity.
The company makes most of its profit and revenue in South Africa and also operates in Kenya, Botswana, Ghana, Zambia, Mauritius, Mozambique, Seychelles, Uganda and Tanzania.