Madinet Nasr for Housing and Development (MNHD) has rejected an acquisition offer made by the Sixth of October for Development and Investment Company (SODIC), citing low evaluation of the company’s shares.
The Egyptian developer SODIC, with a majority owned by the Abu Dhabi-based Aldar, had submitted a non-binding offer to fully purchase MNHD.
A source close to the deal said that the Emirati company will study the possibility of increasing the bid, however, it believes that the offer price was fair and came in line with the requirements of the Financial Regulatory Authority (FRA).
The rule stipulates that the offer price should be 32% higher than the closing price of MNHD share on 4 July 2022. It should also be 45%, 45%, and 40% higher than the volume-weighted average price (VWAP) of the share in the past three, six, and twelve months, which were EGP 2.28, EGP 2.28, and EGP 2.36, respectively.
CI Capital will act as SODIC’s financial advisor in the deal, and Matouk Bassiouny & Hennawy will play the legal advisor’s role.
The company said that in the event of a price revision, due diligence may be approved.
The MNHD’s Board of Directors decided to invite the general assembly of the company to consider conducting the due diligence.
Early this month, the FRA stated that SODIC’s offer includes the acquisition of up to 100% of MNHD shares, at an indicative price ranging from EGP 3.20 to 3.40 per share.
MNHD owns a land portfolio of about 10 million square metres, most of which is under development. Al Barbary Group contributes to its ownership structure with a share of about 19%, the Holding Company for Construction with a 15.2% share, and B Investments with a 7% share.