FirstRand Ltd., South Africa’s second-biggest financial company, said a deal to buy 75 percent of Merchant Bank Ghana Ltd. is proceeding even after former Ghanaian president Jerry Rawlings said it had been blocked.
“It is still on track and we are not involved in the politics,” Sizwe Nxasana, chief executive officer of Johannesburg-based FirstRand, said in an interview yesterday. “We believe in the country and the asset meets our criteria. We also have a counterparty who’s a willing negotiator.”
Rawlings, who came to power after a coup in 1979 and stepped down as president after a second term in 2001, said in a lecture recorded by Ghana’s Citi FM on Oct. 25 that the acquisition had been barred. FirstRand said in August it would buy control of Merchant Bank Ghana from the state pension fund and other shareholders for 746.2 million rand ($86 million).
The transaction, which is undergoing a series of approvals in Ghana and South Africa, might be completed next year, according to Nxasana. With 22 branches and about 500 staff, Merchant Bank Ghana has an infrastructure that FirstRand can build on, he said.
“The transaction has been forwarded to the central bank to peruse and approve,” Eva Amegashie, spokeswoman for the state pension fund, said in a telephone interview from Accra yesterday.
Rawlings is the founder of the ruling National Democratic Congress and chairman of the party’s council of elders, making him privy to key policy making decisions.
FirstRand said in 2009 it planned to enter Nigeria, Ghana and Kenya. Its 2011 bid to buy a majority stake in Nigeria’s Sterling Bank Plc failed after the two couldn’t agree on terms.
FirstRand shares gained 1.7 percent to 29.50 rand at the 5 p.m. close in Johannesburg, its highest level since at least August 1990, when Bloomberg began compiling the data.