Standard Bank: Turning Chinese

From Moneyweb, 03 December 2007
By Geoff Candy

ICBC's purchase of a 20% stake in Standard Bank (JSE:SBK) is a done deal.

Ninety-five percent of Standard Bank's shareholders voted in favour of ICBC buying a 20% stake in the bank and for more shares to be issued. This was despite a note being issued by Citigroup to shareholders recommending they reject the offer & hold out for R161.

ICBC is offering R36,7bn or R120 a share (a 15% premium) for the stake. It will buyback 10% of the banks shares at R136/share (a 30% premium to the price when the offer was made) and subscribe to 10% through an issue of new shares at R105.

Shares will now be diluted and Standard directors will buyback an equal number of shares to the ones sold.

The deal will cut Standard Bank's empowerment shareholding to 8,9%, which is below its rivals & the 10% direct ownership requirement of the financial sector charter. The Tutuwa consortium - 16%-owned by Cyril Ramaphosa's Shanduka, 24% by Saki Macozoma's Safika, 40% by staff, and the other 20% by black small businesses - will give up 11,1% of their shares.

Previously the CEO of Standard Bank, Jacko Maree said the blackownership would not be topped up as the bank believes in the concept of "once empowered, always empowered".

The deal will pave the way for Standard Bank to continue expanding and the two companies will look to provide a one-stop shop for Chinese petrochemical companies wanting to set up a new plant in Africa.

Macozoma and ICBC chairman Jiang Jianqing will be joint deputy chairs of Standard Bank