Barclays eyes $5.3 billion South African deal

Barclays is considering Absa investors' response to a possible 32 billion rand ($5

Barclays is considering Absa investors' response to a possible 32 billion rand ($5.3 billion) bid by the UK bank for 60 per cent of South Africa's largest retail lender.

Britain's third-largest bank said today it had discussed buying 60 per cent of Absa at 80.8 rand a share, a 6 per cent premium to Absa's closing price on Friday.

"Barclays and Absa are considering the feedback from Absa shareholders and will now determine whether a transaction would receive the requisite support from shareholders on terms acceptable to Barclays," the bank said in a statement.

Industry sources said the price demands of minority shareholders could scupper a Barclays bid for Absa.

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Absa's shares have risen around 26 per cent since Barclays said in September it was in talks about a majority stake.

A deal for Absa would mark one of the largest foreign investments in South Africa since it became a democracy in 1994, as well as Barclays' return to the country after the bank was forced to quit in 1986 amid pressure over the apartheid regime.

Barclays was the biggest bank in South Africa at the time but sold its business for a loss after British students, Oxfam and Oxford colleges boycotted the bank because of South Africa's racial policies.