Old Mutual Properties' negotiations to buy independent Durban-based asset management and merchant banking group Marriott are "not far away at all" from conclusion, according to a banking source.

The two are said to be making "positive progress" with the deal, which kick-starts the final bout of industry consolidation in the second-tier banking sector.

Another industry source said it was "just a question of dotting the i's and crossing the t's", with an announcement expected in about two weeks.

Details of the deal have remained sketchy as a result of a media blackout since Marriott Holdings CEO Simon Pearse told Business Day in early August that his group had received an offer from Old Mutual Properties.

It is said that Old Mutual's property arm tabled R500-million for the business, but the life assurer and Marriott are unwilling to comment.

Rand Merchant Bank cast its slide rule over the business earlier in the year, but decided not to pursue discussions. Investec also looked at the group, but Marriott's 50% shareholder - shipping and logistics group Grindrod - decided to proceed with negotiations with Old Mutual Properties.

It was said in banking circles that entrepreneur Eric Molefe planned to bid for Marriott's banking assets.

But a source familiar with the negotiations between Marriott and Old Mutual said nothing had transpired.

Molefe has cropped up as a potential purchaser of banking assets over the years - but has yet to garner the backing to pull off a deal.

The Reserve Bank has never previously granted approval for Molefe to be a bank director or a director of a bank-controlling company.

Repeated attempts to reach Molefe for comment were fruitless.

The likely fate of Marriott's banking unit, after completion of the deal, is unclear. However, it is thought that it could be merged into Old Mutual bank subsidiary Nedbank's BoE Private Clients business, or spun off at the time of purchase.

When Old Mutual and Marriott announce the deal in the next couple of weeks, the combined entity is likely to be South Africa's largest property asset manager with about R27-billion of property under management. - Richard Stovin-Bradford

Business Times
Publisher: I-Net Bridge
Source: I-Net Bridge