Barclays halves stake in Absa via R10.5bn stake sale

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Photo: Elvira Wood
Photo: Elvira Wood

Barclays has sold a 7.4% stake in former African unit Absa for 526 million pounds (R10.5 billion), cutting its holding by half.

The firm priced an accelerated placing of 63 million shares at R164, according to a statement Thursday. That was a 7.3% discount to the Johannesburg-listed stock’s Wednesday close. Barclays gathered enough investor orders to cover the sale within minutes of opening the book, terms seen by Bloomberg showed. 

Absa fell as much as 6.5% on Tuesday morning, before recovering some of the losses to trade down 4% at R169.89 by midday. Barclays shares were little changed.

Barclays had a 15% holding in the African lender before the sale. The British bank, which has had a presence in Africa for more than 100 years, has been reducing its stake in Johannesburg-based Absa in recent years. It sold off much of its controlling stake in the group - then-Barclays Africa Group - in 2017. 

The placing is estimated to result in an increase of approximately 10 basis points to Barclays’ CET1 ratio - a key measure of capital strength - as of December 31, 2021. 

The net proceeds from the deal will be used for the group’s general corporate purposes, Barclays said in the statement. The bank’s remaining 7.4% stake in Absa is now subject to a lock-up restriction, which applies until 60 days after settlement. 

Barclays, Absa, Citigroup, Banco Santander SA and Societe Generale SA are arranging the sale. 

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