Clock ticking on Equity, Atlas Mara deal

The clock is fast ticking on the much anticipated deal between Equity Group and Atlas Mara.

The two parties however expect to review the terms of their deal in which the Kenyan lender was to acquire from the London-listed firm four banks in Rwanda, Zambia, Tanzania and Mozambique, this is after the earlier planned time for the deal conclusion expired.

Atlas Mara was to be paid in the form of Equity shares amounting to a 6.72 percent stake with a current market value of Sh13.6 billion.

The parties Thursday announced they had not signed a binding agreement for undisclosed reasons, adding that their continued negotiations will likely result in a change of the deal terms.

“While there is no assurance that the potential transaction will be concluded on the terms previously announced, the parties continue to be engaged in discussions,” Atlas Mara said in a statement.

While the parties did not disclose their reasons for failing to reach an agreement, the pressure to renegotiate the deal is likely the outcome of a divergence of fortunes of Equity and the four banks it is eyeing.

The transaction was announced in April last year and since then Equity’s prospects have brightened with the recent removal of lending rate controls.

Equity Group and Atlas Mara are yet to sign a detailed pact that will see the company founded by the former Barclays Plc chief executive officer exit four African countries, Equity Group said in a statement Thursday. The preliminary agreement signed in April — which would’ve given Atlas Mara a 6.3% stake in Equity Group in exchange for the units — expired, it said.

For the Kenyan lender, a transaction would help Managing Director James Mwangi’s efforts to expand Equity Group into 15 nations on the continent by 2026, from six markets, to benefit from rising regional trade and the increased use of digital banking services.

Shares in Atlas Mara declined 1.4% by 1:52 p.m. in London after sliding more than 24% over the past two years, hitting a record low in September. Equity Group rose as much as 1.9% on Thursday, having gained 26% in 2019.