Former Barclays CEO Bob Diamond has tied up with the Carlyle Group, an American private equity and alternative asset management company, to prepare a joint bid for the British bank's Africa business. The move is expected to benefit Diamond as it will add credibility to his earlier plans for acquiring the business through his US-based investment vehicle, Atlas Merchant Capital.
Sources, however, told Sky News that they are yet to make a formal approach to Barclays. The bid preparations are still at an early stage, the sources added.
The move follows the present Barclays CEO Jes Staley announcing in March this year that the bank planned to reduce its stake in its Africa business as part of a strategy initiated by him to turn around the bank. Apart from operating Absa, a South African bank which Barclays bought in 2005, the British bank owns 62.3% of the Johannesburg stock exchange listed Barclays Africa Group Limited (BAGL), which has a total market capital of £6bn (€7.69bn, $8.65bn).
BAGL is one of Africa's largest banking groups. It has majority stakes in banks across Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, South Africa, Tanzania, Uganda and Zambia. Apart from these, BAGL has insurance operations in Botswana, Mozambique, South Africa and Zambia and representative offices in Namibia and Nigeria.
Staley had justified his Africa strategy saying that it would allow Barclays "to deconsolidate (BAGL) from an accounting and regulatory perspective, subject to shareholder and regulatory approvals if and as required". Diamond who helped build BAGL during his tenure in Barclays is known to have since been interested in acquiring a majority stake in it.
It was earlier understood that Diamond had spoken to some investors, amongst whom are sovereign wealth funds in the Middle East and Asia. However, now it is clear that Carlyle is the only large private equity firm to have so far shown interest in BAGL.
Sources added that Diamond may seek additional investors for the bid. One likely investor is said to be billionaire Ashish Thakka who founded Mara Group, a Pan-African business services company, operating across technology, financial services, manufacturing, real estate and agriculture industries.