Barclays Africa Group and Afrinvest have been appointed as financial advisers for the sale of Nigeria’s Mainstreet Bank, with AMCON – owner the bank’s assets following its nationalization – keen to relinquish ownership before the year-end.
In a public notice, the asset management firm drummed the bands for interested buyer seeking to acquire shareholdings of the recapitalized bank. The notice read: “Interested buyers (eligible entities or consortia) should indicate their interest by submitting an Expression of Interest (EOI). Prospective buyers are required to submit their EOI in English and titled “Expression of Interest for the Acquisition of Mainstreet Bank Limited.”
AMCON, Asset Management Company of Nigeria, is pushing to wrap up the sale process as quickly as possible, with the deadline for indicating interest pegged at 16th May, less than a fortnight from today.
AMCON took over Mainstreet, along with Keystone and Enterprise Banks – all three nationalized – in 2011 after they failed to meet a September deadline for recapitalization by the Central Bank.
This came despite a $4 billion bailout outlaid by the CBN to starve off a possible default. The three banks failed to attract needed investors as well as close a merger of acquisition deal in time for the recapilization deadline.
How Much?
Mainstreet, formerly known as Afribank before it was taken over, was a mainstay in Nigeria’s banking landscape, labeled one of the top 4 banks in country upon inception in 1959. It currently operates more than 8 subsidiaries, with interests in retail banking, insurance, investment and financial services.
It operates more than 217 branches across the country, boasting an extensive experience in Nigeria banking industry with over 50 years in operations.
The latest total asset value is listed at N330 billion ($2.04 billion), with customer deposit hitting N155 billion ($711 million), according to its 2013 annual report.
Possible Buyer(s)
South Africa’s First National Bank (FNB) is touted as a possible investor, with the bank very vocal about its interest to enter the Nigerian retail banking business in the nearest future.
It already operates an investment unit in the name of Rand Merchant Bank (RMB), following an outlay of $100 million, but is keen on expanding its reach in Africa’s largest economy and most populated country.
An attempt local acquisition was made in 2012 for Sterling Bank, however it withdrew intentions following a $400 million price tag labeled on Sterling. It claimed at that time the price was too high.
However, it refused to withdraw its intention to acquire a local operator, and in 2013, when AMCON made public its willingness to dispose the banks, an opportunity for entry became available again.
While FNB noted it was not interested in Enterprise Bank, Keystone and Mainstreet presented more appealing options for it.
“We would not be interested in Enterprise, but would consider both Keystone and Mainstreet,” Sam Moss, FirstRand’s Director of Investor Relations, said last year.
