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Absa Falls as Investor Offloads at Discount: Johannesburg Mover

Absa Group Ltd., the lender controlled by Barclays Plc, fell to the lowest in more than three weeks after its third-largest investor sold a stake for less than the current share price.

Shares in South Africa’s third-biggest bank slid 2.8 percent to close at 134.60 rand in Johannesburg trading, the lowest intraday level since Sept. 17. The stock was the worst performer in the six-member FTSE/JSE Africa Banks Index.

Batho Bonke Capital Ltd., a South African black investor group, sold 24.6 million shares, equal to about 3.4 percent of the bank, at 132.50 rand a share. The stake was sold at a 4.3 percent discount to yesterday’s closing price, Morgan Stanley, which helped manage the sale, said in an e-mailed statement. That values the stake in the lender at 3.3 billion rand ($381 million).

“Even though it’s small in percentage terms, 24.6 million shares is not a small amount,” Rhynhardt Roodt, an analyst at Cape Town-based Investec Asset Management, said before the pricing of the sale was announced. The decline “will be short term in nature until the overhang is cleared out,” he said.

Batho Bonke, a collection of community trusts, small black-owned companies and women’s groups, was founded by former freedom fighter and politician Tokyo Sexwale. In April 2004, it bought 73.1 million convertible preference shares in Absa at 2 rand each, giving it a 10 percent stake in the company, part of a program to boost black participation in South Africa’s economy. Absa converted those shares to ordinary stock in 2009, buying back 49.9 percent of them, and leaving Batho Bonke with half of its original stake.

“Proceeds realized from the equity placement will be used to settle existing Batho Bonke debt, with the remaining balance distributed by Batho Bonke to the shareholders” in due course, Morgan Stanley said yesterday.

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