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PIC has 'appetite' for Barclays Africa stake

Oct 05 2016 11:05
Janice Kew and Renee Bonorchis

Barclays headquarters in London. (iStock)

Company Data

BARCLAYS AFRICA GROUP LIMITED [JSE:BGA]

Last traded 160
Change 8
% Change 5
Cumulative volume 4038561
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - The Public Investment Corporation (PIC), Africa’s largest money manager, said it’s interested in boosting its holding in Barclays Africa Group [JSE:BGA] and is still considering the best partner to team up with for a bid.

"There is appetite from our side to increase our stake," Dan Matjila, chief executive officer of the PIC, said in an interview in Pretoria on Tuesday.

"We’re still assessing which is the best partner to go with and the best partner with cash," he said, adding that the ideal co-investors would be South African, or if international, a partner who backs South Africans.

Plans by the PIC to form a consortium of black shareholders to buy a stake have been hindered because the South African investors are struggling to raise financing, people familiar with the matter said last month.

While earlier this year the PIC faced competition for the shares, US private-equity company Carlyle Group has now withdrawn from bidding with Bob Diamond’s Atlas Merchant Capital, the former Barclays CEO said last month. Abraaj Group is also no longer in talks for the business either, people familiar with the matter said.

Diamond, who in April said that he and investors were working on a potential purchase with Carlyle, wouldn’t be drawn on whether his bid was ongoing in an interview with Bloomberg Radio in New York last month. The PIC had preliminary meetings with companies tied to Diamond earlier this year.

"Talks with Bob Diamond ended a while ago," Matjila said.

‘Need 'permission’

The PIC, which holds about 6.4% of Barclays Africa on behalf of South African government employees, has seen a lot of interest in getting together a group of investors to buy shares in the Johannesburg-based lender being sold by its parent, Matjila said.

Barclays plans to reduce its 50.1% holding in South Africa’s third-largest bank to 20% or less in order to comply with regulations and boost capital levels.

ALSO READ: PIC's Barclays Africa deal runs into trouble

London-based Barclays sold more than 12% in its African unit to investors including the PIC in May though an accelerated book build. "If there was an accelerated book build we may have to hold a significant amount as a result of our structure and the benchmarks we are expected to track," Matjila said.

"We would need permission if our holding were to go more than 20%."

The PIC, which manages more than R1.85trn in assets, wouldn’t necessarily buy shares just to create a black-investment shareholding in Barclays Africa, but if it did end up with an excess of stock, it could sell these securities to black investors, Matjila said.

"Whether there is a book build, it’s in Barclays’ hands," he said. "They would have to tell us."

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