BNP Paribas offers to buy RCS for R2.7bn

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BNPPari Reuters. People walk in front of a branch of French BNP Paribas bank in Marseille.

Johannesburg - BNP Paribas started talks to buy RCS Investment, a South African provider of consumer credit, from Standard Bank and Foschini Group for 2.65 billion rand.

BNP Paribas Personal Finance will complete the cash transaction by September, Johannesburg-based Standard Bank said in a statement today.

RCS had a net asset value of 1.7 billion rand at the end of September, the statement said.

RCS is a joint venture between Foschini, a clothing retailer that owns 55 percent, and Standard Bank, Africa’s largest lender.

Credit demand from South Africa’s growing black middle class has helped boost retailers’ earnings.

BNP, France’s biggest bank, first expanded in South Africa when it bought a controlling stake in Cadiz’s securities unit in 2011.

Foschini, which may make about 1.4 billion rand, will use the proceeds of the sale to repurchase its own shares, the Cape Town-based retailer said in a separate statement today.

The company has wanted to reduce its shareholding in RCS to less than 50 percent since last year because a large portion of its debt is linked to RCS, it said.

Standard Bank plans to use the additional capital released from the sale to invest in its African operations, the lender said in an e-mailed statement.

“The proceeds will provide Standard Bank with leverage for growth opportunities and will help improve the group’s return on equity,” it said. - Bloomberg News

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