Having already held extensive negotiations regarding the terms of a possible transaction, Barclays said that it would now wait for a reaction from Absa investors. The UK bank is ready to offer 80.8 rand a share in Absa in order to acquire a 60% interest in South Africa’s biggest retail bank. Any concluded deal would then value up to 32 billion rand (GBP2.7 billion).
Barclays and Absa are considering the feedback from Absa shareholders and will now determine whether a transaction would receive acceptable levels of support, at which stage Barclays will revert to the regulatory authorities for final consideration.
Barclays originally entered into talks with Absa in September 2004. South Africa continues to be an enticing prospect for UK banks looking to expand into new markets with greater profit margin prospects as many of South Africa’s population still do not have bank accounts or banking credit facilities
In a statement, the banks said that a combination would be expected to produce significant synergies by accelerating the strategic objectives of both parties, improving Absa’s pre-tax profits by approximately 1.4 billion rand per annum, four years after completion.
