Renee Bonorchis and Janice Kew
NEDBANK Group has agreed to buy 20 percent of Ecobank Transnational, even after the Togo-based lender sold a bigger stake to a Qatari bank.
Nedbank would pay $493.4 million (R5.6 billion) for 4.51 billion shares, the JSE-listed bank controlled by Old Mutual said yesterday in a joint statement with Ecobank.
Nedbank had a right to convert a $285m loan made to Ecobank in 2011 into an estimated 11 percent stake. A second subscription right allowed it to increase its holding to as much as 20 percent, with a deadline of November 25 to exercise the option.
Qatar National Bank, the Middle East’s biggest lender by market value, bought an 11 percent stake in Ecobank for $283m on September 15 to become its top shareholder. This followed the purchase of a 12.5 percent stake valued at $290m earlier last month in its first acquisition in sub-Saharan Africa.
Nedbank’s move makes it the second-biggest shareholder in Ecobank and gives it access to the bank’s customers in more than 30 African countries.
Through the agreement, Nedbank gets the right to representation on Ecobank’s board and has nominated chief operating officer Graham Dempster as a director. Ecobank would exercise its reciprocal right to an appointment on the Nedbank board, it said in the statement.
The Public Investment Corporation bought almost 20 percent of Ecobank in April 2012.
Nedbank had the regulatory approvals it required for the deal, it said in a separate statement. Its common equity tier 1 ratio, a measure of funds held against deposits, would remain within its own target range of 10.5 percent to 12.5 percent after the deal, above minimum requirements set under Basel 3 industry standards.
Nedbank shares fell 1.18 percent to close at R214 on the JSE yesterday. Ecobank lost 1.6 percent to 18.40 naira (R1.27) on the Lagos exchange. – Bloomberg