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Cape Town - BNP Paribas, France's largest bank, has offered to buy unsecured lender RCS Group for R2.65bn from retailer Foschini Group [JSE:TFGP] and Standard Bank [JSE:SBK].
RCS is 55%-owned by apparel retailer Foschini with the remainder held by Standard Bank, Africa's largest lender.
The company was originally started by Foschini and has been operating independently from the company for many years. It has grown into a diversified financial services business which offers store credit cards and also sells personal loans and insurance products in South Africa, Namibia and Botswana.
RCS has over 1 million cardholders and services a network of more than 18 000 retail outlets including Game, Dion Wired, Makro, Pick n Pay, Shoprite/Checkers and Clicks stores countrywide.
The deal will allow Foschini to focus more closely on its core retail business, and reduce its gearing and exposure to the unsecured lending market. At the same time it will remove from its balance sheet a large portion of its debt which relates to RCS.
The business would be housed in BNP Paribas' personal finance unit.
The CEO of BNP Paribas personal finance, Thierry Laborde, said the company “had seized the opportunity to expand its operations into South Africa”.
Said Laborde: “The transaction is in line with our international growth strategy. The potential for growth in South Africa combined with the quality of RCS management has given us great confidence to enter into the local market.”
Foschini, whose share of the net proceeds would be around R1.4bn, said it would use the money to buy back shares, sending its shares 1.8% higher at R107.65 as of 07:25 GMT.
RCS is 55%-owned by apparel retailer Foschini with the remainder held by Standard Bank, Africa's largest lender.
The company was originally started by Foschini and has been operating independently from the company for many years. It has grown into a diversified financial services business which offers store credit cards and also sells personal loans and insurance products in South Africa, Namibia and Botswana.
RCS has over 1 million cardholders and services a network of more than 18 000 retail outlets including Game, Dion Wired, Makro, Pick n Pay, Shoprite/Checkers and Clicks stores countrywide.
The deal will allow Foschini to focus more closely on its core retail business, and reduce its gearing and exposure to the unsecured lending market. At the same time it will remove from its balance sheet a large portion of its debt which relates to RCS.
The business would be housed in BNP Paribas' personal finance unit.
The CEO of BNP Paribas personal finance, Thierry Laborde, said the company “had seized the opportunity to expand its operations into South Africa”.
Said Laborde: “The transaction is in line with our international growth strategy. The potential for growth in South Africa combined with the quality of RCS management has given us great confidence to enter into the local market.”
Foschini, whose share of the net proceeds would be around R1.4bn, said it would use the money to buy back shares, sending its shares 1.8% higher at R107.65 as of 07:25 GMT.
