Investec waiting on Nedcor-Stanbic
ACQUISITION SPECULATION
By AMANDA VERMEULEN
A SUCCESSFUL bid by Nedcor for Standard Bank may well pave the way for Investec to renew its dormant interest in a potential deal with Stanbic-controlled Liberty Life.
Stanbic and Nedcor are scheduled to hear tomorrow the verdict of Judge Nico Coetzee on which body - the Competition Commission or the Registrar of Banks - will vet Nedcor's takeover proposal.
Stanbic petitioned the High Court late last year to issue a declaratory order that the proposed transaction be assessed by the competition authority as well as the banking regulator.
Last year Investec, as part of its ongoing acquisition strategy, had a look at Liberty Life, several banking and insurance players said this week.
After Nedcor made known its intention to merge with Stanbic in September, Investec, among others, had discussions with Nedcor about pursuing talks on Liberty at some stage , should the merger be successful. Investec claims, however, that it did not approach Nedcor.
A merger of the two banks would create a competition issue , as the country's largest life insurance company, Old Mutual, owns 53% of Nedcor and 24% of Stanbic. As a result, Mutual would have 39% of the merged banking entity, and a controlling interest in Liberty.
Nedcor said at various presentations towards the end of 1999 that Liberty, after a merger, would have be to sold or unbundled to satisfy the Competition Commission. This moved several parties to make their intentions known to Nedcor, the dominant partner in the proposed merged bank.
Stanbic, which effectively owns 30% of Liberty, made it clear to Nedcor and parties interested in the life insurance group that Liberty's future rested with its shareholders and management. Any approach would have to be channelled through them, not Nedcor.
An Investec spokesman said the banking group was continuously considering options. In its 1999 financial year, Investec reported total income of R3.3billion, 88% up on the previous year. Of that total, over 60% was derived from the inclusion of acquisitions.
The Liberty issue was not on the cards, the spokesman said, but added that should the merger be successful, the banking group may take another look at the life insurance group .
Investec and Liberty have similar target markets, he said. Other sources aware of Investec's interest in Liberty said the similarities lay in both having extensive asset management operations which could be merged, and a similar weighting towards investment in incomeearning businesses.
Last year there was speculation that Investec would engineer a three-way merger between itself, Liberty and Fedsure in which Investec would have about 15%. The Investec spokesman said such a tie-up was not being considered.
Some analysts believe the logical fit for Liberty would be a merger with Sanlam. Liberty CE Roy Andersen declined to comment.
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