Barclays Africa Purchase Said to Spur PIC Into Selling Sappi

JOHANNESBURG (Capital Markets in Africa) – The Public Investment Corp. sold a stake in Sappi Ltd., the world’s biggest maker of dissolving wood pulp, to help fund its purchase of shares in Barclays Africa Group Ltd., according to a person familiar with the matter.

Africa’s biggest money manager has also sold shares in other companies to help it finance the Barclays Africa stake acquisition, said the person, who asked not to be named because the transactions are still confidential.

The Pretoria-based PIC is buying 7 percent of South Africa’s third-largest bank from Barclays Plc, as the London-based lender sells down its majority stake. The PIC’s shareholding in Barclays Africa will cost about 7.8 billion rand ($606 million).

There were two block trades in Sappi shares this week involving a total of 42.8 million shares. One of them was triggered by the PIC, according to the person. The Sappi share sale would have raised 2.3 billion rand or 1.9 billion rand for the PIC, depending on which of the two block trades it was responsible for, according to data compiled by Bloomberg.

Investec Ltd. informed Sappi that it sold shares in the company to reduce its stake to 2.71 percent, the paper and pulp producer said in a statement on Friday, without giving more details.

The PIC wasn’t immediately able to comment. The company, which administers the bulk of the South African government’s pension fund money, manages more than 1.86 trillion rand and owns stakes in South Africa’s biggest stocks. It owns 12 percent of Naspers Ltd., the country’s biggest company, 11 percent of Sasol Ltd. and 12 percent of MTN Group Ltd., according to data compiled by Bloomberg/

Sappi’s shares fell for a second day, dropping 1 percent to 91.95 rand by the 5 p.m. close in Johannesburg on Friday, and valuing the company at about 51 billion rand. About 6.2 million shares traded, more than 2.1 times the three-month average. Barclays Africa 3.8 percent to 149 rand.