Appetite for acquisitions in the Egyptian Exchange has been fueled by the election of a new president, according to capital market experts.
An alliance of business tycoon Naguib Sawiris and Beltone Financial Holding submitted a
tender offer for a 20% stake in investment bank EFG-Hermes. The offer marks his second attempt to buy a stake in EFG-Hermes after the bank’s shareholders opted for a tie-up with Qatar’s QInvest LLC at the time of his first bid two years ago. EFG-Hermes’s merger plans with QInvest also failed after the banks failed to win approval from the regulator EFSA, according to Bloomberg.
EFG-Hermes said yesterday it appointed HC Securities & Investment to advise on the bid, according to a statement from the company.
Meanwhile, private equity firm Abraaj Group said in a statement on Thursday it offered via one of its funds a mandatory tender offer for up to 100% of Egyptian healthcare firm Cairo Medical Center.
Abraaj added it already has pledges from shareholders owning 50.09% of the company to sell it their stocks. The mandatory tender offer is conditional to 51% of the total outstanding shares being tendered.
In a related vein, Egypt’s market regulator has given the go ahead on Thursday for Huxley Holding Ltd to submit a mandatory tender offer for 11,911,613 shares, or 100% of Cairo Investment and Real Estate Development at EGP 20.5 per share.
The company had announced in February it reached an initial agreement with Huxley Holding Ltd, under which the latter would offer to acquire 100% in the company’s shares at a maximum price of EGP 20.5 per share.
Takeover deals give momentum to the market and are a positive signal for the attractiveness of local equities at current prices, said Ehab Rashad, CEO, MubasherTrade.
He added that forecasts of attracting more investments indicate that more acquisitions will be seen in the coming period, amid expectations of stability in the economic and political levels.
For his part, Atef El Mahmoudy, head of portfolios, Misr Asset Management, said the return of acquisition activities in the local market shows that the market is attractive amid signs of economic recovery following the inauguration of President Abdel Fattah El-Sisi.
He further added that Sawiris-Beltone bid for EFG-Hermes affirms that positive outlook for the country’s financial investment sector, while Abraaj buyout bid for Cairo Medical Center reflects the strength of the healthcare and pharmaceutical sectors.
Moreover, Huxley’s buyout bid for Cairo Investments highlights the attractiveness of the real estate sector, El Mahmoudy noted.