Nedbank Buys 20% of Ecobank as Qatari Lender Builds StakeRenee Bonorchis and Janice Kew
Nedbank Group Ltd., the South African lender controlled by Old Mutual Plc, has agreed to buy 20 percent of Ecobank Transnational Inc., even after the Lome, Togo-based company sold a stake to a Qatari bank.
Nedbank will pay $493.4 million for 4.51 billion shares, the Johannesburg-based lender said today in a joint statement with Ecobank. Nedbank had a right to convert a $285 million loan made to Ecobank in 2011 into an estimated 11 percent stake. A second subscription right allowed it to increase its holding in Ecobank to as much as 20 percent, with a Nov. 25 deadline to exercise the option.
Qatar National Bank SAQ, the Middle East’s biggest lender by market value, bought an 11 percent stake in Ecobank for $283 million on Sept. 15 to become its top shareholder. This followed the purchase of a 12.5 percent stake valued at $290 million earlier that month, QNB’s first acquisition in sub-Saharan Africa. Nedbank’s move makes it the second-biggest shareholder in Ecobank and gives it access to the lender’s customers in more than 30 African countries.
Nedbank was little changed at 217.06 rand as of 2:35 p.m. in Johannesburg. Ecobank fell 0.5 percent to 18.5 naira in Lagos.
Through the agreement, Nedbank gets the right to representation on Ecobank’s board and has nominated Chief Operating Officer Graham Dempster as a director. Ecobank will exercise its reciprocal right to an appointment on the Nedbank Group board, it said in the statement.
The Public Investment Corp., which manages the equivalent of about $150 billion of the South African Government’s pension fund money, bought almost 20 percent of Ecobank in April 2012.
Nedbank has the regulatory approvals it requires for the deal, it said in a separate statement. Its common equity tier 1 ratio, a measure of funds held against deposits, remains within the lender’s target range of 10.5 percent to 12.5 percent after the deal, above minimum requirements set under Basel III industry standards.