By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)- Atlas Mara Co-nvest Limited (ATMA.L), the investment vehicle of Bob Diamond, former Barclays Bank group chief executive officer (GCEO) on Friday announced it has increased its stake in Union Bank of Nigeria Plc (UBN) to 29.9 percent for a deal worth $270 million according to a statement from the investment company.
The company said the stake was purchased from the Asset Management Corporation of Nigeria (“AMCON”) and it marks the third significant acquisition by Atlas Mara, set up last year by Diamond and Africa-based entrepreneur Ashish Thakkar with a goal to become Africa’s leading bank.
The firm announced that it has exercised an option agreement to acquire approximately 20.9 percent in Nigeria’s Union Bank for a price of approximately $270 million.
Atlas Mara said upon completion of the transaction, the company will own a total combined interest in UBN of 29.9 percent, consisting of the acquisition of the shares from AMCON and the existing UBN shares indirectly held by Atlas Mara through its subsidiary, ADC African Development Corporation AG (“ADC”).
The statement affirmed that as at June 30, 2014, UBN had approximately $6.3 billion of assets, $1.7 billion in loans, $3.1 billion in deposits and $1.3 billion in equity. It is a household name with one of the most trusted and recognizable brands in Nigeria. Atlas Mara’s implied purchase price of the AMCON stake represents a price-to-book multiple for UBN of ca. 1.0x.
“I am delighted that we are increasing our stake in such a storied institution. Expanding into Nigeria has been a focal point of our strategy and achieving a significant ownership position in an institution of the size, heritage and potential of UBN represents a unique opportunity.
We know the team at UBN and are strong supporters of what they have achieved, as well as their identification of and focus on what there still is to achieve. We at Atlas Mara are committed to building a leading sub-Saharan African financial services group and we look forward to contributing to the transformation of UBN into a Tier 1 Nigerian bank as an integral part of this strategy,’’ John Vitalo, CEO of Atlas Mara said.
On his part, Diamond, co-founder and director of Atlas Mara said: “This is a very significant acquisition for Atlas Mara. With it, we will have a significant stake in a key Nigerian bank and we will also have established strategic market positions in three of Africa’s leading economic communities: the Southern Africa Development Community, the East Africa Community and Economic Community of West African States.”
Thakkar, co-founder and director of Atlas Mara said is a very exciting announcement for the company. ‘’By increasing our stake in UBN, combined with the completed acquisitions of BancABC and ADC and our pending acquisition of the commercial banking operations of BRD, we are well on the way to becoming a leading African financial institution that will benefit from, and contribute to, the continued growth of rapidly expanding sub-Saharan Africa,” Thakkar said.
Atlas Mara said completion of the deal is subject to satisfaction of certain conditions, including receipt of regulatory consents. ‘’The parties are working collaboratively to obtain regulatory approval and satisfy closing conditions as promptly as possible,’’ the investment firm said.
Atlas Mara may be required to provide AMCON with an advance payment of the purchase price, provided AMCON provides security for repayment satisfactory to Atlas Mara. ‘’If the conditions to the Transaction are not satisfied or waived before December 31 2014, Atlas Mara may demand repayment of the advanced purchase price. The date may be extended by mutual agreement,’’ the statement affirmed.
UBN is a publicly-traded financial institution with substantially all of its operations in Nigeria. It has a rich heritage dating back to 1917 and, since then, has provided a broad range of banking services to retail and commercial customers, predominantly in Nigeria, sub-Saharan Africa’s largest economy. UBN currently has a network of almost 340 branches across the country.
At the end of today’s trading on the Nigeria bourse, share price of UBN gained 40 kobo as it opened N8.16 and closed N8.56 climbing 4.90 percent.
