Johannesburg - Atlas Mara, the company co-founded by former Barclays head Bob Diamond, plans to sell a 35 percent stake to Fairfax Africa Holdings so it can increase its stake in a Nigerian bank.
Atlas Mara will raise $200 million selling new shares to existing shareholders and Fairfax Africa and by issuing a convertible bond to the Toronto-based investment company, Atlas Mara said in a statement on Wednesday.
London-listed Atlas Mara also agreed to acquire an indirect 13.4 percent shareholding in Union Bank of Nigeria from the Clermont Group for $55 million, which will raise its effective stake in the Lagos-based lender to 44.5 percent.
“A strategic partnership with Fairfax Africa creates a
strong relationship between two like-minded, long-term investors in
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Union Bank has been Atlas Mara’s single biggest investment
Atlas Mara, which has investments in banks across seven African countries, has lost almost 80 percent of its value since an initial public offering in December 2013 as growth across the continent slowed and currencies weakened, hurting profit converted back into dollars.
Diamond, 65, in February ousted Chief Executive Officer John Vitalo and pledged to cut annual operating costs by $20 million after expenses engulfed income and threatened the company’s ability to expand through acquisitions.
Fairfax Africa agreed to buy at least 30 percent of the $100
million of new shares at a price of $2.25 apiece, representing an implied
purchase price of 0.33 times book value, the company said in a separate
statement. Atlas Mara’s stock has traded at an average this year of $2.26,
according to data compiled by Bloomberg. The shares fell 0.5 percent to $2.50
as of 9:02 a.m. in
“Banks are at the forefront of economic development in
The partnership with Fairfax Africa, which has investment
holdings across Africa, will give