Manuel pushes UK’s Barclays for commitment to SA
Stephen Gunnion
--------------------------------------------------------------------------------
E-Mail article Print-Friendly
Financial Services Editor
FINANCE Minister Trevor Manuel will be looking for a clear signal of Barclays’ commitment to SA before he gives the go-head for the UK bank to make an offer for a majority stake in Absa.
The minister placed the ball firmly back in Barclays’ court this weekend following a high-powered meeting with Reserve Bank governor Tito Mboweni, Barclays CE John Varley, international retail and commercial banking CEO Dave Roberts and Absa chairman Danie Cronje and CEO Steve Booysen.
One industry source said empowerment and a moratorium on retrenchments were likely to be included as conditions for the minister’s approval.
He would probably want the deal to be funded in full from offshore as half of Absa’s future dividends would leave SA as a result of the takeover.
The management and board composition of the group would also probably be a consideration, the source said.
“The discussions included an evaluation of conditions under which such an acquisition may be permitted,” the national treasury said in a statement.
The treasury said Manuel must be satisfied that the deal would be in the public interest, as well as that of Absa’s own customers.
He would make his decision only once the banks had responded to this, the treasury said.
Barclays spokeswoman Liz Hooper said: “The conditions are detailed, wide-ranging and numerous, and both ourselves and Absa will have to study them carefully and consider a response.”
However, despite the meeting, the UK bank is no closer to making a detailed offer for Absa.
Royce Long, portfolio manager at RMB Asset Management, said the statements had not really changed the situation. “This is just confirmation that the process is still on track,” he said.
Long said the regulators would be setting a precedent with their decision on the transaction.
“I sympathise with the dilemma faced by the policy makers,” Long said. “You have got to assume that they have to get their minds around not just one transaction but potentially others involving the remaining banks.”
Long said that no price could be offered to Absa’s existing shareholders before the regulators endorsed the transaction.
Absa said while no agreement had yet been reached on any offer being made by Barclays, discussions were continuing.
Absa head of strategic communications Nick Cairns said the process had been “very consultative”.
“We are very comfortable with the progress to date and how things are going,” Cairns said.
“It’s in line with our thinking.”
Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information.
