OWN CORRESPONDENT, Johannesburg | Thursday 11.30am.
FINANCE Minister Trevor Manuel’s voto on banking group Nedcor’s hostile takeover of Standard Bank Investment Corporation has been hailed as a victory for consumers over shareholders, and a blow against monopolies.
Manuel on Wednesday blocked Nedcor’s hostile bid for Stanbic, because of competition concerns.
Manuel had elevated the interests of consumers above those of shareholders, analysts and observers said after the announcement was made in the National Assembly in Cape Town.
Standard Bank CEO Jacko Maree said he was relieved by the ruling. The chief economist of Econometrix, Dr Azar Jammine, told The Star he was not sure the value added by the merger was worth the kind of job losses that would have followed.
Manuel had also vetoed the merger on the grounds that the proposed relocation of 670 ATMs would reduce access to this service in some areas and was not in the public interest.
Welcoming the decision, Stanbic said in a statement that the board has the fullest confidence in its chief executive Jacko Maree.
”I decline to grant permission for Nedcor to acquire over 49% of the total nominal value of the issued shares in Stanbic,” Manuel told parliament.
Nedcor shares slumped more than 3,6% in the wake of the announcement before recovering to last trade down 300 cents at R135. Stanbic shares fell 4,09% or 105 cents to R24,60.
”I am surprised,” said Investec banking analyst Hennie Strauss. ”The minister was commenting on the business case but you would imagine shareholders would be able to evaluate that for themselves and make an informed decision on the business reasons,” Strauss said.
The attempt by Nedcor, the country’s most highly rated commercial bank, to create Africa’s biggest bank have been vehemently opposed by Stanbic ever since the offer was first made in September 1999.
South Africa’s competition watchdog had also expressed reservations about the deal, which would have been the biggest corporate takeover in the country’s history.
Nedcor had offered one of its shares for every 5,5 of Stanbic’s, which is South Africa’s biggest bank in terms of assets. The merged unit will have had more than half of the country’s credit card market, along with cash, cheque and transmission account deposits.
The deal could have resulted in the loss of around 10000 jobs, about a fifth of the combined workforce, over three years. — Reuters