Bloomberg: Zenith, Access Banks Express Interest to Acquire Union Bank

Obinna Chima with agency report

Two Nigerian lenders – Zenith Bank Plc and Access Bank Plc – are among the list of financial institutions from Africa and the Middle East that have indicated an interest in the acquisition of Union Bank Plc and other African assets of Atlas Mara Group, a Pan-African banking group.

Bloomberg which disclosed this quoted sources familiar with the matter to have disclosed that Atlas Mara Limited, the London Stock Exchange-listed pan-African banking group started by Mr. Bob Diamond has received a number of approaches for its 49.97 per cent holding in Lagos-based Union Bank of Nigeria.

Zenith Bank Plc and Access Bank Plc are among the suitors that have expressed interest alongside other African rivals such as Morocco’s Attijariwafa Bank, the sources said.
THISDAY also confirmed the development from sources in the two tier-1 banks, who also pleaded to remain anonymous.

Middle Eastern banks and private equity suitors have also shown interest, according to the sources. Some potential buyers have indicated that they may acquire all of Atlas Mara’s remaining assets in Africa, which would include its Zimbabwe unit, they said.

Atlas Mara has been working with Rothschild & Co. to consider options for its Union Bank stake. No final decisions have been made, and there’s no certainty the deliberations will lead to a transaction, the people said.
Representatives for Atlas Mara and Zenith Bank didn’t immediately respond to requests for comment. Attijariwafa Bank Managing Director Ismail Douiri and a representative for Access Bank declined to comment.

A deal could bring down the curtain on Atlas Mara’s African foray after Diamond, a former Barclays Plc chief executive officer, misjudged competition on the continent and overpaid for acquisitions. The company said recently that it’s secured regulatory approval for the sales of its businesses in Botswana and Mozambique and received interest in other assets, without elaborating.
Atlas Mara also said it completed a planned restructuring process and extended a standstill agreement with its creditors to May 17 to complete the necessary documentation. It’s still in legal disputes with two creditors, TLG and Norsad, it added.

The coronavirus pandemic has accelerated the need to reposition the company, which has seen a plunge of about 96% in its stock since it started trading toward the end of 2013. The firm’s stake in UBN, Nigeria’s sixth-biggest bank by market value is its largest investment and seen as a foothold into the continent’s most populous nation.

Commenting on the matter, Frontier and Sub-saharan Africa Banks’ Analyst, Renaissance Capital, Adesoji Solanke, wrote in a note made available to THISDAY yesterday: “Good for Atlas Mara if they’re able to exit successfully, as they’ve been selling a bunch of assets over the past year, to KCB and Access Bank respectively across different markets. Whether they get a good valuation for Union Bank is another thing.

“We don’t think it’ll be a transformational deal for Access or Zenith (Return-on-Equity dilutive for both), but could be a good way for the Middle Eastern banks to get a decent foothold in the market. We suspect getting the other private equity investor block to sell will be critical as we wouldn’t expect a strategic bank investor to desire a minority shareholding.”