By Mohammed Ayyad
The Egyptian Financial Supervisory Authority (EFSA) has requested the two companies bidding on a 20% purchase share of EFG-Hermes to provide further clarification and meet further requirements.
Egyptian company Beltone and New Egypt from the Netherlands, led by Egyptian businessman Naguib Sawiris, have recently put forward an offer on 20% purchase shares of EFG-Hermes.
Sherif Sami, head of the body, said of the two bidding companies said: “We will take action on the purchase offer after 48 hours of getting all the necessary disclosures from the “Sawiris-Saba” alliance.”
He added: “The oversight body expects to receive the alliance’s disclosures over the next two days, and then we will make a final decision on the offer.”
“The offer to buy a 20% stake in EFG-Hermes by a group of investors is still under consideration, but we have asked for more disclosures from those making the offer,” Sami said on Sunday.
According to a statement on Tuesday, the board of directors of EFG Hermes decided to appoint an independent financial adviser to look into the fair price of the shares. The move comes in response to an offer put forward by a Sawiris-led consortium to buy 20% of the company’s total shares at a price of EGP 16 per share. The purchase can only take place provided EFSA approves the deal.
According to the statement, the board’s decision was adopted in a meeting on Monday to assist shareholders in assessing the attractiveness and fairness of the optional purchase bid. The decision will also help the shareholders preserve their rights in the final decision.
EFG-Hermes does not consider the offer an acquisition, but rather a restructuring of shareholders. The company affirmed that it welcomes Naguib Sawiris, a successful investor, and considers his interest an expression of confidence in the company and its management.
“The purchase offer confirms the confidence in our company, and that we are a good and competitive commodity,” said a manager in EFG-Hermes who requested anonymity, “It shows that we are competitive, and completion of the deal depends on how proceedings move forward and the value of the stock, but we will maintain our competitive position in the domestic and foreign market.”
The company, the manager continued, rejects any merger attempts– even if the deal goes through – with any competitors in the market. He added that the company sees this as against the interests of shareholders, mentioning that Beltone, one of Hermes’ competitors in Egypt, is part of the consortium submitting the offer.
Beltone is one of the largest financial institutions in Egypt with 17 companies under its umbrella specialising in investment activities, asset management and securities underwriting and offerings. Its market value is EGP 216.6m, whereas EFG-Hermes’ market value on the stock exchange is EGP 8.063bn.
EFG-Hermes, the largest investment bank in the Middle East, has several subsidiaries and a stake in Credit Libanais. It operates in Egypt, Jordan, Lebanon and across the GCC.
Naguib Sawiris, chairman of New Egypt, said in a press release on Monday, “After accomplishing the first two steps in the political roadmap with the adoption of the constitution and the election of the president, this is the first major investment in Egypt after I announced my intention to invest heavily in the Egyptian market.”
“In the coming period we will look for other investments in several areas, and we expect to see a lot of activity in the Egyptian market as Egypt stabilizes and takes the last steps towards democratization,” he said, adding, “The only thing I would like to say is that this is proof of our confidence in the young management team of Hermes.”
Naguib Sawiris, alongside Planet Investment Group, previously tried to acquire Hermes in 2012 whilst shares were EGP 9, but the deal was suspended and left incomplete.