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As Diamond preps bid, SA warns on 'play' for its banks

May 04 2016 12:00
Renee Bonorchis

Johannesburg – The South African Reserve Bank isn’t comfortable with private equity companies owning stakes in the country’s lenders, Deputy Governor Kuben Naidoo said.

"As a regulator we won’t be comfortable with a private-equity play for any of the banks," he told reporters in Pretoria on Tuesday. It may cause instability because private equity firms use leverage and need to create exit strategies, whereas banks need long-term commitments from shareholders with deep pockets, he said.

The comments come as Bob Diamond pulls together a group of investors, including US private-equity giant Carlyle, for a potential bid for Barclays controlling stake in its Johannesburg-based African business.

Atlas Mara, the venture Diamond and Ugandan entrepreneur Ashish Thakkar formed to buy African banks, said last week that the firm is in talks on potentially buying Barclays Africa Group, which it could combine with its own operations.

Representatives from Atlas Mara held meetings with the Reserve Bank on Tuesday, according to reception records at the Pretoria-based regulator. Diamond, 64, who ran Barclays before his 2012 ouster during the Libor scandal, said on a conference call on April 26 that his consortium includes long-term strategic investors and that there is funding in place.

mergers and acquisitions  |  mining
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