Africa focused investment bank, Atlas Mara has upped its stake in tier two lender Union Bank to 48%. Prior to the rights issue, Atlas had a 42% stake. Union Bank recently concluded a N50 billion rights issue, which is 20% over subscribed. Proceeds will be used to bolster its capital base and provide loans for emerging areas in the Nigerian economy.
Could a take over bid be near the horizon ?
Atlas is just 2% shy of the 50% mark, at which point it would have to make a tender offer for the remaining shares not held by it. Atlas, first bought a stake in Union from the Asset Management Company of Nigeria (AMCON) in 2012, and has progressively increased its holdings. It has often expressed willingness to take over Union, which would serve as an example of its Africa focused strategy working .
Nigeria is one of the largest economies in Africa and Union Bank has been turned around from its loss making position.
Atlas Mara Limited (formerly known as Atlas Mara Co- Nvest Limited), founded on November 28, 2013 by Bob Diamond and Asish Thakkar is an Africa focused financial services holding company. Atlas has over 1600 employees, an asset base of $2.5 billion and operations in 7 African countries namely Botswana, Zimbabwe, Tanzania, Mozambique, Rwanda and Nigeria.
While Union Bank was founded in 1917 is one of Nigeria’s oldest commercial banks. The Asset Management Company of Nigeria (AMCON) injected N239 billion as capital into the bank in 2011.
Union bank shares closed at N8.37 in today’s trading session on the Nigerian Stock Exchange (NSE), up 4.26%.