London firm to buy BancABC for P2.3bn
Brian Benza | Thursday April 3, 2014 11:13
ABC Holdings, which is listed in the Botswana Stock Exchange (BSE) through its operating brand BancABC, offers financial services in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe.
ADC, a London Stock Exchange (LSE) listed operation trading in Frankfurt, owns 47.1 percent of BancABC and 9.1 percent of Union Bank of Nigeria.
Under the transaction, Atlas Mara has secured agreements to acquire at least 51 percent of the issued shares in ABC at a price per share of 82 cents (P7.20).
Yesterday, ABC was trading at P5.17 on the BSE.
At the transaction price, Atlas will acquire ABCH for US$210 million (P1.8 billion).
Atlas also said it intends to make a public share-for-share takeover offer for ADC at an exchange ratio of 1.25 times Atlas Mara shares per ADC share.
Atlas Mara was formed by Atlas Merchant Capital led by former Barclays plc chief Bob Diamond and Mara Group Holdings founded by Ashish Thakkar, Africa’s youngest billionaire.
Atlas Mara said it expects to fund the acquisition via proceeds of its previously completed IPO and the issuance of shares.
“When we formed Atlas Mara last September, we had a clear vision that there was an opportunity to be part of a leading financial institution in sub-Saharan Africa,” Diamond told a meeting in Gaborone this week.
He said when they finalised, “the equity raising (US$300 million), we looked extensively at where the best opportunities would be in Africa and we had our sights on a high quality, multi-country bank in one of the regions of Africa.”
Diamond further noted that, “We can help start with rock solid funding, a technological platform for business to scale up and securing the best talent across Africa. We are not passive investors and we want to truly add value. We are operators.”
Diamond, who quit as Barclays chief executive officer in July 2012 after the British bank was fined for manipulating benchmark interest rates, and Ugandan entrepreneur Thakkar raised $300 million in an initial public offering for Atlas Mara in December. The two then committed $20 million of their own money to the Atlas Mara venture.
The investment firm is looking for African financial-services companies that can help businesses manage currency and commodity risks.
“Under the deal, Atlas Mara will immediately invest US$100 million into the ABCH group and this will help us to raise capital adequacy ratios in our operating sites, from a bare minimum. The country that gives us the highest returns will receive the most. Access to capital is part of what this transaction brings and I hope that from now the whole scenario of us being cash-hungry will change,” said ABC group chief executive officer Doug Munatsi.
The next move, he said, is to obtain regulatory approvals from central banks, government institutions, including indigenisation approvals so that the deal becomes unconditional.
“There’s no limit to the equity they can take up, up to 100 percent,” said Munatsi.