Strategic Investors in Union Bank of Nigeria, Atlas Mara has said that it is weighing options to go private. This comment was attributed to the CEO of Atlas Mara, Bob Diamond, according to a report on Bloomberg.
The article claims Bob Diamond is looking to take his company private shielding it from a continuous drop in its share price. The company is said to have lost over 80% of its value since it acquired banking assets in Sub Sahara Africa. With emerging markets facing currency crisis and loss of asset values, investors in these companies have seen their share prices plummet putting pressures on the owners to achieve their long term objectives.
The report also claims South Africa’s PIC and Dubai’s Albraaj Group have both shown interest in investing in Atlas Mara, a move that could see them provide the funding required to take them private. If their plans go right, then Union Bank could stand to benefit as its strategic investors could increase their investment in the bank, providing it with the capital required to compete with the likes of GT Bank and Zenith who have since displaced Union Bank as the largest banks based on deposit base.
Union Bank shareholders approved a rights issue of about N50 billion December 2016. The bank is said to open the right issue officially as no date has been fixed yet.
Union Bank shares as remained flat over the last one year trading at N4. 91 per share. Price earnings ratio is currently 4.7x its earnings and is still unable to pay dividends due to its huge negative reserves. The bank has been on a transformation since Atlas Mara took over replacing its aging workforce, changing its logo and being more aggressive with lending and asset creation.