* Barclays selling 10.3 million shares to South Africa's PIC
* Talks about PIC increasing its stake in BAG -source
* PIC not part of a consortium looking at BAG stake -source (Recasts with Barclays selling 12 pct stake )
By Tiisetso Motsoeneng
JOHANNESBURG, May 4 (Reuters) - Barclays Plc saidon Wednesday it is selling shares representing 12 percent ofBarclays Africa Group and that South Africa's statepension fund would be an anchor investor.
Barclays Plc is selling down its 62 percent stake, which isworth some $5 billion, in Barclays Africa Group (BAG) under aplan by new Chief Executive Jes Staley to simplify the bank'sstructure and generate higher shareholder returns.
Barclays said in a statement it would sell 103.6 millionshares in BAG, with up to 10.3 million shares going to SouthAfrican state pension fund Public Investment Corporation (PIC),representing up to 1.2 percent of BAG.
"This is an important first step as we seek to reduce ourshareholding in Barclays Africa to a level that achievesaccounting and regulatory deconsolidation," Staley said in astatement.
PIC, Africa's largest fund manager with more than $122billion of South African government employee pension assetsunder its custody, is already the second-biggest shareholder inBAG with a holding of about 6 percent.
Earlier on Wednesday, a source with direct knowledge of thematter told Reuters in Johannesburg that talks were taking placebetween PIC and Barclays about the fund buying some of theBarclays holding.
"There are discussions going on about the PIC increasing itsstake in Barclays Africa," the source said, declining to benamed because the matter is private. "There's no PIC-ledconsortium. It's just the PIC,"
The PIC is the second investor to show interest in BAG,which runs South Africa's biggest retail bank, after a sourcetold Reuters last month that Atlas Mara has teamed upwith private equity group Carlyle to prepare a bid.
However, any deal involving a private equity player couldface regulatory opposition from South Africa's central bank.
"As a regulator, we would not be comfortable with privateequity play for any of the banks," deputy governor Kuben Naidoosaid at a press conference in Pretoria on Tuesday. He did notcomment on any specific bank.
Valued at $330 million, Atlas Mara was set up by formerBarclays Chief Executive Bob Diamond, who has confirmed that hisfirm has already lined up funding for an offer, withoutelaborating on what form the financing would take.
($1 = 14.8052 rand) (Additional reporting by Nqobile Dludla and Lawrence White;Editing by Alexander Smith)
Barclays (BARC)
