Atlas Mara to Increase Stake in Union Bank

Atlas Mara, the African investment vehicle of former Barclays boss, Bob Diamond intends to pay $55m for an indirect 13.4 percent shareholding in Union Bank of Nigeria. This deal is expected to increase Atlas Mara’s direct and indirect holdings in the bank to 44.5 percent.

The $55m will be part of the $200m that will be raised from the sale of a third of Atlas Mara to a Canadian life insurer, Fairfax Financial at an 80 percent discount to its 2013 listing price. Under the agreement, Atlas Mara stated that it will sell $100 million worth of new shares at $2.25 per share to Fairfax and existing shareholders, and then sell a $100 million mandatory convertible bond to Fairfax.

According to Financial times (FT), the Canadian group is expected to have a total shareholding of at least 35 percent of Atlas Mara after the deals are completed, and will nominate four directors to its nine-strong board. The deal will make Fairfax Africa a new Africa-focused fund set up by the Canadian insurer, the biggest shareholder in Atlas Mara.

“Our board is thrilled to announce this important series of transactions. We have a terrific new partner in Fairfax Africa — a strategic investor and partner who brings permanent capital and a shared vision of the banking opportunities in sub-Saharan Africa,” Mr Diamond told FT.

It would be recalled that in 2014, Atlas Mara paid $275 million for 20.9 percent stake which increased its stake in Union Bank of Nigeria from 9.1 percent in the bank through its purchase of Africa Development Corp. to 30 percent.

The firms target is to become Africa’s leading bank through acquisitions; its investments have seen it gain a foothold in seven sub-Saharan countries which includes Botswana, Mozambique, Rwanda, Tanzania, Zambia, Zimbabwe and Nigeria.

Bob Diamond is regarded as one of the world’s best-known bankers. Diamond spearheaded the growth of Barclays’ investment bank before being forced out in 2012 by UK regulators after the bank was fined for the attempted rigging of Libor interest rates. According to Reuters, “his plans in Africa could put him in direct competition with Barclays, which has had a presence there since the 1920s and is one of the biggest international banks on the continent.”