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Bob Diamond raises £200m to invest in African banks Bob Diamond could gain millions from new African investment venture
(about 7 hours later)
Bob Diamond, ousted as boss of Barclays last year following the Libor-rigging scandal, has staged a dramatic return by raising £200m in a stock market listed company targeting the acquisition of financial services companies in Africa. Bob Diamond, ousted as boss of Barclays last year after the Libor-rigging scandal, potentially stands to reap millions of pounds from a new stock market venture set up to acquire financial services companies in Africa.
The American banker – often criticised for the size of his pay cheques – has become a non-executive director of a cash shell which has ambitious plans to buy into fast-growing African banks. The American banker, often criticised for the size of his pay cheques during his 15-year tenure at Barclays, has become a nonexecutive director of a cash shell that has raised £200m from a stock market listing in London, although it is registered in the British Virgin Islands.
The 62-year old, who was forced out of Barclays after regulators said they had lost confidence in his management, has linked up with Ashish Thakkar, who started his first IT company in 1996 at the age of 15 in Uganda and now runs a conglomerate with operations in 19 African countries. Along with his co-founder, Ashish Thakkar - a British national now based in Dubai - Diamond has special "founder-preferred shares" in the new vehicle, known as Atlas Mara Co-Nvest, which give the pair payouts if the share price rises above a certain level.
The listed company – known as Atlas Mara Co-Nvest – is based on Diamond's New York company Atlas Merchant Capital and Thakkar's Mara range of businesses across Africa. The two companies have invested $20m. Atlas Mara Co-Nvest is based on Diamond's New York company Atlas Merchant Capital and Thakkar's Mara range of businesses in 19 African countries. The two companies have invested $20m. Thakkar, often described as Africa's youngest billionaire, started his first IT companies in 1995 at the age of 15 in Uganda and is one of the World Economic Forum's young global leaders.
Diamond's interest in Africa is well known. Through his family charity – the Diamond Family Foundation – he has been attempting to set up an annual lecture on Africa and is known to have visited Nigeria recently. In a stock market announcement, Atlas Mara Co-Nvest said that although it was not involved in any discussions with target companies, it could make acquisitions anywhere in the world, and was likely to pick Africa. To counter concerns that shell companies often tie up investors' cash without making deals, the business will be wound up in 12 months if no deals have been concluded by then.
In a stock market announcement Atlas Mara Co-Nvest said it did not have any discussions with target companies under way and said it could make acquisitions anywhere in the world. Arnold Ekpe, a former boss of Africa's Ecobank, has been appointed chairman of the company, on an annual fee of $125,000. The company has also named a number of nonexecutive directors, including Rachel Robbins, a former vice-president of the International Finance Corporation, who will get $85,000 a year. Ekpe is also receiving 50,000 five-year options over the shares, which listed at $10, and the nonexecutive directors are getting 37,500. Neither Diamond or Thakkar is receiving any options or fees.
"However, given the experience of the company's founders and its board, the company expects to focus on acquiring a company or business in the financial services sector with all or a substantial portion of its operations in Africa," the announcement said. The prospectus shows a higher fee, of $500,000, will go to Jyrki Koskelo, a former executive of the World Bank who will advise on potential acquisitions. The founder-preferred shares give the founders a payout if the shares rise above $11.50 for 10 consecutive days after an acquisition. The payout, in shares, is based on 20% of the difference between $11.50 and the share price.
"The directors believe that there are significant gaps in the market today including the need for capital created by European financial institutions retreating to their home territories due to the sovereign debt crisis and the Basel III regulatory framework at a critical time for growth in Africa." The 133-page prospectus said that while Barclays could face litigation over Libor fixing, Atlas Mara Co-Nvest does not believe it will have "an adverse impact on the company or its ability to make the acquisition (or subsequent acquisitions) or on MrDiamond's ability to perform his role for the company".
The former boss of Africa's Ecobank, Arnold Ekpe, has been appointed chairman of the company, which has also named a number of non-executive directors, including Rachel Robbins, a former vice president of the International Finance Corporation.
Diamond left Barclays in July 2012 just days after the bank was fined for rigging Libor and after the bank's then chairman, Marcus Agius, was summoned to the Bank of England to be told that Diamond needed to leave.
Agius, who also quit, told MPs on the Treasury select committee how he had been summoned to see the then Bank of England governor, Lord King, with the bank's non-executive director, Sir Michael Rake.
"We had a conversation in which he said that Bob Diamond no longer enjoyed the support of his regulators," said Agius at the time.
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