Absa Investors Back $2.1 Billion Barclays Africa Buy

Absa Group Ltd. (ASA) investors voted to approve the South African bank’s $2.1 billion all-share offer for most of Barclays Plc (BARC)’s African assets.

Absa offered on Dec. 6 to issue 129.5 million shares to parent company Barclays as part of an agreement to integrate the U.K. lender’s African operations. Almost 97 percent of shareholders, excluding Barclays, voted in favor of the deal at the general meeting in Johannesburg today, exceeding the 50 percent plus one vote required.

The approval marks “the birth of a pan-African banking giant,” Absa Chairman Garth Griffin told shareholders today.

Absa will be renamed Barclays Africa Group Ltd. and Barclays’s stake in the Johannesburg-based bank will rise to 62.3 percent from 55.5 percent. Absa and Barclays are seeking to boost profit by combining products and customer bases across a continent with faster growth rates than developed nations.

“The deal is transformational, the purchase price appears fair and capital leakage is minimal,” Greg Saffy, a Johannesburg-based analyst for RMB Morgan Stanley, said in an e- mailed response to questions on Feb. 22.

Absa closed at 164.50 rand, up 1.5 percent, in Johannesburg. The shares have gained 6.4 percent over the past year.

The transaction still needs approval from regulators, including South African Finance Minister Pravin Gordhan.

Some Absa investors, including Africa’s largest pension fund, had questioned the all-share offer, saying the lender should use its cash surplus to help finance the deal. Using cash would have increased the cost, Maria Ramos, chief executive officer of Absa, said in an interview on Feb. 12.

To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net

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