PIC in ‘behind-the-scenes’ talks on Barclays Africa stake

PUBLIC Investment Corporation CEO Dan Matjila said on Friday that “behind-the-scenes” talks about buying a 10% stake in Barclays Africa were ongoing, but reports that a consortium of investors, including the PIC, had been formed were off the mark.

Bloomberg reported that a consortium including the PIC is to meet Barclays plc next week, attributing the news to a person who had asked not to be identified as the talks are private.

But Matjila said on Friday: “It’s just individuals talking about how this thing can be done, but there is no consortium. We don’t have a consortium yet.”

Barclays plc, which owns more than 62% of the South African bank, said last month that it was retreating from the continent as part of a plan to raise cash, shrink globally and lighten its capital burden.

Three people with knowledge of the process said on Thursday that Barclays plc was preparing initially to sell 10% of its African unit to several large investors, while keeping open the option to divest its entire holding.

Matjila, when asked about how large a stake the PIC wanted, said: “These are market-sensitive questions. They can affect the share price.”

The PIC already holds 5.6% of the bank’s stock, according to Barclays Africa’s annual report, published last month. “We still have to get [board] approval,” Matjila said. “So I’m reluctant to say we are committing [or] we are going to buy because that process is not yet completed from inside [the PIC].”

He said lots of people claimed to have spoken to the PIC. “Some ideas are good, some not so good. We haven’t put any expression on the table. All I can say is that discussions are happening behind the scenes. We can only comment when there’s something concrete on the table.”

Matjila said “a BEE flavour will be good if they can bring money to the table. We want a South African consortium so that South Africans can take a significant portion of this.”

He said the challenge to putting together a deal was that Barclays wanted to sell quickly to meet its regulatory requirement. “We need to figure out what would be the most economic and broadest way of structuring the transaction.”

Barclays Africa shares closed 4.42% higher on Friday at R135.75.

“At these kinds of price levels I am sure there would be plenty of interest from South Africa and emergingmarket fund managers,” said Adrian Cloete, a bank analyst at PSG Wealth.

Barclays plc and Barclays Africa declined to comment.

The interest from South African investors was a good thing for the local unit, said Harry Botha, a banks analyst at Avior Capital Markets who has a neutral recommendation on the lender. — Additional reporting by Bloomberg