Atlas Mara cofounder Bob Diamond has agreed to sell over a third of the company to Canadian insurance group Fairfax Financial, specifically to Fairfax Africa Holdings.
The transaction will see Atlas Mara’s listing price at 80% less than its initial public offering in 2013. Atlas Mara was founded by Diamond as a vehicle for investment in African banks.
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“Our board is thrilled to announce this important series of transactions,” said Diamond. “We have a terrific new partner in Fairfax Africa — a strategic investor and partner who brings permanent capital and a shared vision of the banking opportunities in sub-Saharan Africa.”
For selling new stock to existing shareholders and Fairfax Africa, Atlas Mara is expecting to receive $200 million. The firm will also issue a new convertible bond to Fairfax, the company said in a statement Wednesday.
Atlas Mara will use the proceeds gained from the transaction to fund its investment and boost its holdings in Union Bank of Nigeria, from 31% to 44.5%.
Once closed, the deal will make Fairfax Africa the biggest shareholder in Atlas Mara. Following the transaction, the company is expected to have a total shareholding of at least 35%, allowing Fairfax to nominate four directors to Atlas Mara’s board. Fairfax will also have the right to secure a minimum of 30% of the share offering, and will subscribe for any shares not taken up by current shareholders; Diamond will continue as Atlas Mara’s executive chairman.
According to data compiled by Bloomberg, existing investors in Atlas Mara will experience a dilution of about 35% following the transaction.
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