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Tuesday April 05, 06:43
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Barclays and Absa still in talks
(by Tash Koon)
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Barclays Plc, the U.K.’s third-largest lender, and South African bid target Absa said on Monday that they are about to discuss an offer for a margin stake. The analysts report that the Pretoria government is likely to agree.
A Barclays spokeswoman in Johannesburg said many conditions were attached to Britain’s third-largest bank taking a majority stake in Absa, South Africa’s biggest lender with a market value of 50.1 billion rand.
"The conditions are numerous, detailed and wide-ranging. Both Absa and ourselves will have to study them carefully and consider our response," spokeswoman Liz Hooper said.
"The regulatory approval appears to be granted. What’s left are the negotiations with Absa’s shareholders. We would expect a resolution on that this week," one London-based analyst said.
"We understand they have already made a price with the major shareholders, including an escalation provision in case the price goes higher," said the financial source close to the banking groups.
"In the event of a liquidity or solvency issue at Absa, would Barclays as the major shareholder be prepared to put their entire balance sheet behind Absa. That would be one of the primary concerns facing regulators and the finance ministry," said Chris Steward, fund manager and banking analyst at Investec Asset Management in Cape Town.
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