Cairo: EFG Hermes said on Saturday an independent financial adviser had set its fair share price at 22.93 Egyptian pounds ($3.21) whereas the price offered by Beltone and New Egypt Investment Fund for a stake in the bank was 30 per cent lower.
The bid for a stake in the Egyptian investment bank could help to revive deal making in Egyptian equities after more than three years of stagnation following the overthrow of Hosni Mubarak in 2011.
EFG Hermes appointed Cairo-based HC Securities & Investment this month to evaluate the fair value of its shares and help shareholders decide whether to accept an offer to acquire a 20 per cent stake in the bank at 16 pounds per share.
“We see that the price offered ... is less than the fair value of the share,” EFG Hermes said in a statement.
Beltone and Egyptian billionaire Naguib Sawiris are offering around $257 million for the EFG stake, with the offer document stating that EFG will also be granted the chance to take over the financial group that owns 17 companies specialising in investment and asset management activities among other operations.
EFG Hermes has said it does not consider it “economically viable” to accept the proposal to acquire Beltone Group, including Beltone Financial Holdings and Beltone Financial for Formation and Management of Portfolios and PE Funds.
“Now it is difficult for the deal to succeed,” said Karim Abdel Aziz, equities funds manager at the National Bank of Egypt. “The fair price is a lot higher than the Sawiris-Beltone offer.” The offer was initially to run until July 3, but the financial regulator said after close of trading on Thursday that it had no objection to extending it until July 6 given that next Tuesday the stock exchange will remain closed.
EFG Hermes in 2012 agreed on a deal with Qatar’s QInvest to spin off part of its assets to create an investment bank with operations spanning the Middle East, Africa and Turkey. But the deal fell through as did another previous Sawiris-backed offer.
EFG Hermes is one of the Middle East’s biggest investment banks, with operations in Egypt, Saudi Arabia, the United Arab Emirates, Kuwait, Jordan, Lebanon, Oman and Qatar.
The government of Dubai owned 11 per cent of EFG Hermes as of the end of March, making it the biggest shareholder, according to Thomson Reuters data. EFG has a free float of about 67 per cent.
The bid-offer submitted to Egypt’s financial regulator said that New Egypt Investment Fund would buy 17.82 per cent of EFG Hermes, while Beltone planned to acquire 1.09 per cent and Beltone Capital Holding would acquire another 1.09 per cent.
EFG Hermes shares closed at 15.35 Egyptian pounds on Thursday, down 0.3 per cent.