Barclays Africa may already have a willing buyer

·4 Mar 2016

Barclays may already have a willing bidder for Barclays Africa’s assets outside of South Africa.

This is according to a report in the Financial Times and follows an announcement by the bank on Tuesday that it will be selling down its stake in Barclays Africa Group.

In its report, the group stated its intention to sell down its stake in Barclays Africa “to a level which permits accounting and regulatory deconsolidation” over the next two to three years.

The group said it will have a “non-controlling investment” in the group over time, under 20%

Barclays is the majority stakeholder in Barclays Africa – which trades as Absa in South Africa – with a 62.3% stake in the group. The group did not say how much of its stake it would be letting go of.

According to the FT, Bob Diamond, the former Barclays chief executive, is approaching investors to back a takeover bid for the Africa business.

Diamond is reportedly seeking investment to buy up Barclays Africa operations outside of South Africa, in Botswana, Ghana, Kenya, Mauritius, Mozambique, Namibia, Nigeria, Seychelles, Tanzania, Uganda.

These 11 countries account for about 20% of Barclays Africa’s profits.

The paper reported that Diamond has held preliminary talks with global investors, citing people familiar with the matter.

“People who know the former Barclays boss said he had discussed his move with potential investors, adding that sovereign wealth funds in the Middle East and Asia are seen as the most likely sources of funding.”

According to the FT, regulators are expected to block any attempt to merge with local banks including FirstRand or Nedbank.

Barclays may be forced to sell down its African stake into the market by offloading it in chunks to institutional investors, due to a lack of ‘strategic buyers’ for all of the bank’s shares in Barclays Africa Group.