| Fri 2 Jul 2004, 10:46 | | FirstRand banks tidy premium as Ansbacher gets Qat |
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FirstRand banks tidy premium as Ansbacher gets Qatari base
July 2, 2004
By Sherilee Bridge
Johannesburg - FirstRand, the country`s second-largest bank by assets, will sell its interest in Ansbacher Holdings, the international wealth management group, to Qatar National Bank (QNB) for £135 million (R1.515 billion).
FirstRand, which bought Ansbacher for £52 million in 1992, said yesterday that the sale price carried a £15 million premium to its net asset value.
The local bank said it would use the money raised from the sale to expand its domestic and international operations.
In July last year FirstRand said it wanted to find a strategic partner for Ansbacher, but in January, after agreeing to pay a €7.5 million (R56 million) tax settlement to the Irish government, it said it would sell the investment.
Over time the Ansbacher asset had become `non-core`, FirstRand said.
Ansbacher has operations in the Cayman Islands, the Bahamas, the Channel Islands, Switzerland and the UK.
The Qatari government holds 50 percent of QNB, the largest bank in the oil-rich gulf state. With total assets of $10 billion (R62 billion), it is one of the top 50 banks in the world by capital.
In a statement on the JSE Securities Exchange news service, FirstRand said: `The transaction fits in with QNB`s long-term strategic objectives to grow its private banking operations. More specifically, the acquisition will enable QNB, which has branch operations in London and Paris, to expand its presence and product offerings in the region.`
Jacque Badenhorst, an analyst at JP Morgan, told Bloomberg: `It`s great that [FirstRand] has been finally able to sell [Ansbacher] and by the sound of it they got a pretty good price.`
According to FirstRand, the purchase price will be settled through an initial consideration based on the net asset value of the business plus half of the £15 million premium.
The residual premium will be based on the performance of certain of the developing Ansbacher businesses during 2005 and 2006.
All of Ansbacher`s funding commitments will be taken up by QNB and FirstRand has entered into a profit-sharing arrangement on the development of one of the central London properties that forms part of the group.
FirstRand did not rule out a long-term strategic relationship with QNB.
Laurie Dippenaar, the chief executive of FirstRand, told Bloomberg that the bank was aiming to grow its business in areas that were more complementary to its South African strategy and in sectors where it had `a sustainable, competitive advantage`.
FirstRand`s shares dipped 9c to close at R10.10 yesterday, while the bank sector of the JSE fell just 0.24 percent.
