Carlyle Said to Halt Talks With Diamond on Barclays Africa

  • Regulators are concerned about a private-equity deal
  • Barclays may now sell all of 50.1% stake in unit on market

Talks between Carlyle Group LP and Bob Diamond’s Atlas Merchant Capital LLC about a joint bid for Barclays Plc’s African unit have stalled, people with knowledge of the matter said.

Carlyle executives are concerned that Barclays might be reluctant to sell its stake in Barclays Africa Group Ltd. to a consortium including Diamond, who led the London-based bank until 2012, and that regulators would block a sale to a private-equity firm, said one of the people, who requested anonymity because the details are private.

There are also complexities related to funding the deal in a manner that would gain backing from regulators that signaled concern about private-equity ownership, one person said.

A series of groups have failed to bid for Barclays’s 50.1 percent stake in the South African lender, prompting the U.K. bank to consider selling its remaining shares on the Johannesburg Stock Exchange instead, people familiar with the matter have said. Diamond, 65, wants to combine the unit with Atlas Mara Ltd., his African banking group that’s struggling with bad loans, currency losses and mounting costs. He remains interested in buying a stake, one person said.

Officials for Atlas Merchant in London, Carlyle and Barclays declined to comment.

‘Financial Capability’

Barclays Chief Executive Officer Jes Staley had earlier said that Diamond may lack the “financial capability” to buy the African business. Staley told a conference Monday that he had “increased confidence” in his bank’s plan to exit its African subsidiary, given strong demand for its recent offering on the Johannesburg market.

Diamond’s interest in the Barclays unit emerged in April, when he confirmed that he was seeking to pull together a group of investors, including New York-based Carlyle, for a joint bid.

“The consortium has committed long-term strategic investors,” Diamond said on a conference call in April. “The funding is in place. There is support for this potential transaction.”

Plans by the Public Investment Corp., or PIC, to form a group made up of black shareholders to buy a stake in Barclays Africa are being hindered because the South African investors are struggling to raise financing, people familiar with the matter said last week. The Dubai-based Abraaj Group, which had planned a separate bid for Barclays Africa, has lost interest and is no longer in talks, the people said at the time.

If Barclays decides to sell its remaining shares on the stock market, PIC may purchase a small stake along with other local investors, one of the people said.

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