London - Robert Diamond, whose Atlas Mara has plunged 48 percent since going public in 2013, was scolded by investors for failing to buy back shares that are trading at less than book value.
“I would like to see less dialog and optimism and more action to capitalize on the inefficiency that seems to exist in the stock price,” Leon Cooperman, CEO of Omega Advisors, told Diamond on a conference call Thursday. “I don’t see any attempt to do something to show the market that you really believe what you’re saying.”
Diamond, co-founder of British Virgin Islands-based Atlas, created the firm to acquire African banks, using his expertise as the former CEO of Barclays to help the continent’s financial-services industry become more sophisticated. The shares have tumbled as losses mounted and economic growth in sub-Saharan Africa slowed. He said on the call that Atlas is “leaving no stone unturned” to improve the company’s prospects.
“It seems the more upbeat you guys get, the lower your stock price goes,” Cooperman said. “I have confidence in you. The market doesn’t. I want to capitalize on this market’s lack of confidence. I wish you good luck."
A caller identified as working for Janus Capital Group said Diamond and other executives should be buying back stock or explain why they can’t.
Prohibition mystery
Atlas Mara’s largest investors are constrained by lack of liquidity from buying more stock, said the caller from Janus, the firm’s largest shareholder according to data compiled by Bloomberg. "That leaves two gaps - the company finds incremental buyers to capitalize on this or the company takes its destiny into its own hands,” he said.
Diamond said the current price offered investors a good opportunity to buy into Atlas, while he and his colleagues were restricted from purchasing more shares.
“We can’t say why we’re prohibited,” said Diamond, 64. “We’re very bullish."
Atlas still wants to create the region’s “premier bank,” even amid falling currencies and slowing economic growth this year, Diamond said on the call from Lusaka, Zambia’s capital.
Hearing frustration
Atlas shares fell 0.2 percent to $5.69 as of 11:05 a.m. in London trading, extending Thursday’s decline, when the company announced its first half-year profit.
"I can hear the frustration coming through the line and we share your frustration on multiple levels,” Brad Gibbs, a member of the Atlas Mara executive committee, said on the call. The firm has looked into providing investors a more detailed explanation of why buybacks aren’t possible, and decided “it wouldn’t be prudent,” he said. “We’re doing everything in our power to get out of this period.”
Net income for the company, which operates in seven sub- Saharan African countries from Nigeria to Zimbabwe, was $4.1 million in the first half, up from a loss of $17.3 million in the year-earlier period, Atlas said in a statement. The company is targeting a presence in 10 to 15 countries in the medium- term, it said.
Book value per share, the amount investors would get if all assets were sold and debts repaid, was $9.13 at the end of June, according to the statement. Profit rose as impairments dropped to $6.1 million from $17.2 million in the same period of 2014.
BLOOMBERG