Absa to become Barclays Africa

At the general meeting on Monday morning‚ (25 February) 98.85% of shareholders voted in favour of the issue of 129.5m Absa shares to Barclays.

In terms of the deal‚ Absa will issue 129‚540‚636 new Absa ordinary shares at R141.50 each and take over eight Barclays operations in Africa outside SA. Barclays will increase its stake in Absa to 62.3% from 55.5%.

After the deal was announced last year‚ the Absa share price gained more than 6% to about R150. Absa will soon be renamed Barclays Africa Group.

The Public Investment Corporation (PIC)‚ South Africa's largest institutional investor‚ voted in favour of the merger between Absa and Barclays' Africa operations‚ despite concerns that the deal will dilute the holdings of minority shareholders.

The PIC said the R18.3bn deal gave Absa an opportunity to diversify its income outside the mature market represented by South Africa.

"Dilution is not too much of a concern if it comes with bigger prospects for the entire group. As long as the return on rands invested is higher‚ we will be satisfied with that outcome‚" the PIC said.

"We support the deal primarily because this provides Absa with an immediate exposure to a higher growth trajectory market," it added.