Barclays Plc said it sold about one-fifth of its stake in Barclays Africa Group Ltd. for about $879 million as part of Chief Executive Officer Jes Staley\u2019s plan to overhaul the British lender.<\/p>\n
The bank sold 12.2 percent of Barclays Africa\u2019s shares to money managers, leaving it with a holding of 50.1 percent, it said in a statement on Thursday.<\/p>\n
The shares were bought for 126 rand each, a discount of about 11 percent to the average price over the past 30 days, according to data compiled by Bloomberg.<\/p>\n
The sale is expected to increase Barclays\u2019 common equity Tier 1 ratio, a measure of financial strength, by about 10 basis points.<\/p>\n
\u201cThis represents an initial step towards delivering management\u2019s previously stated strategy to sell down its stake in Barclays Africa Group\u00a0to a level that will permit regulatory de-consolidation over the next two to three years,\u201d Gary Greenwood, an analyst at Shore Capital Group Ltd., who rates Barclays a buy at 162 pence, said in a note.<\/p>\n
Barclays will only be able to reap significant capital benefits from the process once its stake drops below 20 percent, he said.<\/p>\n
Staley, who took over last year, announced on March 1 the bank was retreating from Africa with other measures to raise cash, shrink globally and lighten its capital burden.<\/p>\n
Barclays Africa is South Africa\u2019s third-largest bank and has operations in 12 nations across the continent, with more than 12 million customers.<\/p>\n
While it continues to grow and has produced both increased profit and dividends,\u00a0European and U.K. banking regulations have eroded the parent company\u2019s ability to benefit from the expansion.<\/p>\n
Barclays sold 40 percent of the shares to investors in South Africa and\u00a0international money managers took up the rest, two people familiar with the matter\u00a0said, asking not to be identified because the deal hasn\u2019t settled yet.<\/p>\n
The shares went to well-known institutions, according to the people.<\/p>\n
Hedge funds also received some of the shares, they said. Barclays declined to comment.<\/p>\n
There were more than 125 investors interested, Barclays Africa said, without disclosing names.<\/p>\n
The top 25 investors were allocated about 90 percent of the offering and some of the investors are new to Barclays Africa, it said.<\/p>\n
Others, such as The Public Investment Corp., Africa\u2019s biggest money manager, are existing shareholders, the bank said.<\/p>\n
Shares in Barclays Africa fell as much as 4.2 percent to 129.05 rand, and were down 0.2 percent at 134.49 rand as of 2:11 p.m. in Johannesburg, the lowest on a closing basis since April 7.<\/p>\n
Barclays declined 0.4 percent to 161.75 pence in London.<\/p>\n
One of the parties that\u2019s expressed an interest in the African business is former Barclays CEO Bob Diamond, who is readying a bid via a consortium of investors including U.S. private-equity giant Carlyle Group LP. Diamond, who has said he has lined up the capital and long-term investors for a potential offer, would combine the business with his African-banking company Atlas Mara Ltd.<\/p>\n