Barclays begins offloading Africa business with 12 percent stake sale

JOHANNESBURG (Reuters) - Barclays Plc BARC.L said on Wednesday it is selling shares representing 12 percent of Barclays Africa Group BGAJ.J and that South Africa's state pension fund would be an anchor investor.

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Barclays Plc is selling down its 62 percent stake, which is worth some $5 billion (3.4 billion pounds), in Barclays Africa Group (BAG) under a plan by new Chief Executive Jes Staley to simplify the bank’s structure and generate higher shareholder returns.

Barclays said in a statement it would sell 103.6 million shares in BAG, with up to 10.3 million shares going to South African state pension fund Public Investment Corporation (PIC), representing up to 1.2 percent of BAG.

“This is an important first step as we seek to reduce our shareholding in Barclays Africa to a level that achieves accounting and regulatory deconsolidation,” Staley said in a statement.

PIC, Africa’s largest fund manager with more than $122 billion (84.23 billion pound) of South African government employee pension assets under its custody, is already the second-biggest shareholder in BAG with a holding of about 6 percent.

Earlier on Wednesday, a source with direct knowledge of the matter told Reuters in Johannesburg that talks were taking place between PIC and Barclays about the fund buying some of the Barclays holding.

“There are discussions going on about the PIC increasing its stake in Barclays Africa,” the source said, declining to be named because the matter is private. “There’s no PIC-led consortium. It’s just the PIC,”

The PIC is the second investor to show interest in BAG, which runs South Africa's biggest retail bank, after a source told Reuters last month that Atlas Mara ATMA.L has teamed up with private equity group Carlyle to prepare a bid.

However, any deal involving a private equity player could face regulatory opposition from South Africa’s central bank.

“As a regulator, we would not be comfortable with private equity play for any of the banks,” deputy governor Kuben Naidoo said at a press conference in Pretoria on Tuesday. He did not comment on any specific bank.

Valued at $330 million, Atlas Mara was set up by former Barclays Chief Executive Bob Diamond, who has confirmed that his firm has already lined up funding for an offer, without elaborating on what form the financing would take.

Additional reporting by Nqobile Dludla and Lawrence White; Editing by Alexander Smith