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Ex Chairman, Fidelity, Ecobank, Obat Oil and more eye Enterprise Bank Purchase

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Twenty-four investors are already in the race to acquire the 100 percent holdings of the Asset Management Corporation of Nigeria (AMCON) in Enterprise Bank, including medium tier banks and oil companies, BusinessDay has learnt.

Top on the list of investors that have signified their intentions in the bank are Fidelity, Sterling, Ecobank, and Standard Chartered Bank. Others are Obat Oil, Taurus Holdings, Sahara Energy, and the Emeka Onwuka group.

However, Barclays Africa Group, which has been speculated to have interest, has said “it was not looking to make an expensive acquisition in Nigeria but would look to grow its footprint cautiously”, according to BusinessDay South Africa.

“We have a rep office there. We do some business in Nigeria and we are going to grow that business and I think quite cautiously over time, and then we will see what opportunities present themselves,” said Antony Jenkins, Barclays Group CEO, on the sidelines of the One Young World Summit in Johannesburg last week. “Obviously, in the medium term we would like to have a bigger presence there but we are not going to make some big inorganic play which would be very expensive.”

This is ditto for South African Rand Merchant Bank. According to Michael Larbie, chief executive officer, RMD, and regional head, RMD West Africa, “Our bank has not been actively involved in any quest to acquire local banks. Obviously, it is much publicised that we did express interest in some of the AMCON recapitalised banks and that remains so.”

Although Barclays Africa Group is looking to bank multinationals expansion in Africa, analysts say it probably makes business sense to start with a corporate banking footprint in Nigeria, similar to that of FirstRand’s Rand Merchant Bank (RMB).

RMB previously had a representative office but was later awarded with a merchant banking licence in Nigeria.

Barclays Africa Group does not have much representation in Nigeria. From a South African banking perspective, Standard Bank, which trades under Stanbic IBTC Bank in Nigeria, is the only lender with a footprint offering retail and corporate banking in the West African country.

The development in Enterprise Bank, the first of Nigeria’s three nationalised lenders to be put up for sale, is coming on the heels of speculations that South African banks are interested in the AMCON recapitalised banks.

While about five tier-2 banks bidding for the bridged bank want to scale up their positions so as to contend with top industry players for fair market share, the oil companies are seeking diversification for enhanced income streams.

Interestingly, the inclusion of Emeka Onwuka, the immediate chairman of the bank, who resigned last week to team up with other investors to bid for the bank, is being considered by some analysts as posing a moral burden on AMCON. They say Onwuka’s position may have placed him in an undue advantage with insider knowledge of the affairs of the bank.

According to a release from the bank last week, Onwuka was said to have written a resignation to AMCON informing it that “he was resigning from Enterprise Bank to avoid a potential conflict of interest and to protect the credibility of AMCON’s divestment process, as he intends to work with a group of investors, who are interested in acquiring equity in the three nationalised banks”.

BusinessDay learnt that most of the chief executives of the oil companies are either former bankers or managing a group overseeing oil trading and banks relationships (local and International), among others.

According to AMCON, upon the receipt and evaluation of Expression of Interests (EoI), a shortlist of buyers who, in its view, are deemed to be fit and suitable from a regulatory perspective (among other things), will be prepared and will proceed to the first phase of the transaction. Shortlisted buyers will be contacted and advised on next step.

“The stage is not an invitation to tender,” says AMCON, adding that interested buyers should make their independent enquiry regarding the transaction.

Based on the 2012 audited accounts, the bank has seven subsidiaries, 150 branches with total assets of N263.5 billion ($1.6 billion) and total equity of N31.9 billion ($195.3 million), AMCON said in the notice.

AMCON, which holds non-performing assets of troubled banks, had in July appointed Citigroup and Vetiva Capital to manage the divestment.

Article Credit: Business Day Newspaper

Updated 5 Years ago

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