Ex-Barclays Boss Targets 44.5% Stake in Union Bank

• Ex-Barclays Boss Targets 44.5% Stake in Union Bank

A former Managing Director of Barclays Bank PLc, Mr. Bob Diamond, has agreed to sell more than a third of Atlas Mara, the vehicle he created to invest in banks in Africa including Nigeria.

He will sell the stake to the Canadian life insurer Fairfax Financial at an 80 per cent discount to its 2013 listing price.

The deal, which will partly fund Atlas Mara’s investment in the Union Bank of Nigeria Plc, may leave existing investors in the London-listed vehicle facing painful dilution, including Janus Capital, Wellington Management, Guggenheim and Diamond himself.

Specifically, Atlas Mara will use some of the money to increase its holding in Union Bank.

It intends to pay $55m for an indirect 13.4 per cent shareholding in UBN, taking its combined direct and indirect holdings in the bank to 44.5 per cent, according to a Financial Times report.

A Union Bank spokesperson, Ogochukwu Ekezie, said the lender was going through regulatory approvals and would then start the share sale.

Atlas said on Tuesday that it would raise $100m through an offering of new shares, which would be sold at $2.25—a 10 per cent discount to Tuesday’s closing price—and a further $100m through the issuance of a mandatory convertible bond to Fairfax.

Fairfax, which is run by Canadian investor Prem Watsa, will also have the right to secure a minimum of 30 per cent of the share offering, and will subscribe for any shares not taken up by existing shareholders.

The Canadian group is expected to have a total shareholding of at least 35 per cent of Atlas Mara after the deals are completed, and will nominate four directors to its nine-strong board.

The deal will make Fairfax Africa, a new Africa-focused fund set up by the Canadian insurer, the biggest shareholder in Atlas Mara.

“A strategic partnership with Fairfax Africa creates a strong relationship between two like-minded, long-term investors in Africa,” Atlas Mara said. “Each is focused on capitalising on the long-term growth potential of Africa and provides permanent capital to support growth.”

The new share offering came shortly after Atlas Mara was forced to raise extra funds in an overnight placing in February.

The vehicle has had a difficult year, which also saw the departure of its chief executive, a drop in profits and the announcement of a big reorganisation and cost-cutting programme.

However, Diamond, who chairs the group, is aiming to double Atlas Mara’s earnings in the coming year.

“Our board is thrilled to announce this important series of transactions,” Diamond said.

“We have a terrific new partner in Fairfax Africa — a strategic investor and partner who brings permanent capital and a shared vision of the banking opportunities in sub-Saharan Africa,” he added.

Aiming to create the first pan-African banking group based on new technologies, Atlas Mara has acquired interests in seven sub-Saharan countries, including Nigeria, Botswana, Zimbabwe, Mozambique, Rwanda, Tanzania and Zambia.