Billionaire businessperson Patrice Motsepe has moved a step closer to buying a significant stake in Barclays Africa as part of his ambitious plan to build a respected black-owned financial services company, insiders claim.
Two highly placed sources close to Motsepe said this week the mining magnate has assembled a top-level team of analysts, who will work closely with the co-chief executive of African Rainbow Capital, Johan van Zyl, to look at the Barclays deal and advise him on its viability.
“A lot of work is being done to ensure we get to a point where we will say: ‘We are ready to buy.’ There has been interest [in the Barclays deal] from day one, but it’s very complex. Johan [van Zyl] and the analysts have been engaging to understand the [Barclays] strategy,” said an insider who is familiar with the internal discussions about the Barclays deal.
Although the insider could not say how many shares Motsepe was looking to buy from Barclays, he said it would be significant enough to make him a vital player in the financial services sector. Barclays Africa operates under Absa’s brand locally.
Last month, Motsepe, along with former Sanlam veterans Van Zyl and Johan van der Merwe, officially launched African Rainbow Capital, a money management firm, to invest in a range of sectors, including financial services and private equity investments, and to build interests in banking, insurance, distribution, asset management, property, and healthcare administration and management.
The company, jointly with Sanlam, has so far reportedly acquired the insurance broker Indwe Broker Holdings for R200-million, and has backed the JSE-listed special purpose acquisition firm Capital Appreciation, as well as online rental property manager PayProp and MetroFibre, which provides fibre-to-the-home broadband solutions.
Van Zyl said this week that African Rainbow Capital would focus on several things that fell within its scope, but refused to give more details. “We look at a range of stuff all the time. I couldn’t comment on whether Absa [Barclays Africa] was one of them,” he said.
He said the question of whether the company was considering buying a stake in Barclays Africa was “price-sensitive stuff” and could not be commented on. “If I were to speak to one person about it, we would have to make an announcement.”
Asked whether Motsepe had assembled a team to look at the potential purchase of a stake, he said: “That may be so, and it may not be so. It may also not be African Rainbow Capital.” He added that Motsepe had a number of other business interests.
Betty Mollo, the investor relations and corporate development manager at Motsepe’s African Rainbow Minerals, said: “The companies that are associated with Mr Motsepe often receive inquiries based on speculation about deals that they are supposed to be pursuing, and sometime these inquiries relate to companies that they have not heard of. The policy, therefore, is not to comment on speculation about deals that are perceived to be pursued.”
Last week, Barclays Plc began its divestment in the African group, selling a 12.2% stake to a range of investors. The anchor investor was the Public Investment Corporation, which took another 1.2%, bringing its total share to 7.2%.
The shares were sold at a 6.5% discount to the market price. The demand was high and the offering was oversubscribed (meaning fewer investors received shares than those who sought to buy them).
But Barclays Plc still holds a stake of 50.1% and will have to sell off much more to rid itself of the regulatory burden that the African ownership has brought it. To achieve this, it will need to reduce its shareholding in Barclays Africa to less than 20%. So another 30%, with a current market value of around R35-billion, could be up for sale.
On its website, African Rainbow Capital says its strategy is to become a fully integrated financial services business in South Africa, including banking and insurance services.
A second company insider said the plan to purchase the Barclays stake was in line with the firm’s bigger vision. He said Motsepe was particularly interested in the parts of Barclays that were profitable.
“There are different pillars in Barclays. You have certain legs of Absa that are making money, some are breaking even and others are loss-making,” he said. African Rainbow Capital was also looking at buying shares in Capitec and Postbank, the source said. – Additional reporting by Lisa Steyn