Barclays has recouped just over R13bn (£600m) from selling a chunk of its stake in its African subsidiary at a 7 per cent discount to the market price.
The accelerated bookbuilding to sell a 12.2 per cent stake in Barclays Africa Group Limited, which is separately listed on the Johannesburg stock exchange, cut the UK bank’s holding to slightly more than 50 per cent.
The R126 per share price of the placing to institutional investors was done at a 7 per cent discount to the company’s previous close of R134.72 and is more than a third below its 52-week high. Barclays said the sale would boost its capital ratio by 0.1 percentage points.
Bankers said the shares were sold to about 20 institutions, many of them in South Africa. The Public Investment Corporation, South Africa’s state-owned pension fund manager and its most powerful investor, agreed to act as an anchor for the placing and bought 10 per cent of the shares sold, taking its stake in Barclays Africa to about 7.2 per cent.
Jes Staley, Barclays chief executive, described the move on Wednesday as “an important first step” in reducing its stake in the African business, adding: “We continue to explore opportunities to reduce our shareholding, including capital market and strategic options.”
Last month, Barclays said rising regulatory pressures meant it had decided to sell much of its 62 per cent stake in the African business after owning operations on the continent for almost a century. It has given itself two to three years to cut its holding to below 20 per cent and indicated an interest in keeping a minority stake.
The UK bank has had approaches from several potential bidders for its African business, including its former chief executive Bob Diamond, whose Altas Merchant Capital venture has teamed up with US private equity group Carlyle to explore an offer.
Bankers, however, say there are few obvious strategic buyers for the business, making an exit by selling the stake down on to the open market a likely possibility.
On Tuesday, Kuben Naidoo, deputy governor of the South African Reserve Bank, said the central bank was not comfortable with private equity companies taking stakes in the country’s financial institutions.
His comments were not directed at Mr Diamond’s consortium and the central bank said it would not comment on individual cases. But it illustrated the regulator’s concerns about a bank being bought by an investor with a short-term investment horizon or reliance on leverage. Mr Diamond told the Financial Times recently that his consortium was “not private equity, it is permanent capital.”
Mr Staley said: “Barclays Africa is an important partner, and we are working closely with local management, including planning for the operational separation of the two businesses in a way that will preserve value for shareholders in both the Barclays and Barclays Africa groups.”
Barclays' restructuring in 90 seconds
Barclays Africa owns stakes in banks in 12 countries across the continent from South Africa’s Absa, its largest asset, to Ghana and the Seychelles.
The placing is being handled by Barclays, Citigroup, JPMorgan Chase and UBS. Barclays will be restricted from selling more shares for 90 days.
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