Egypt’s Beltone Financial and billionaire Naguib Sawiris were offered 48 per cent of the shares they were seeking for a 20 per cent stake in investment bank EFG Hermes, traders closely following the deal said yesterday.
Beltone and Sawiris’s New Egypt Investment Fund had offered around $257 million (Dh943.9 million) for the EFG stake at 16 Egyptian pounds ($2.24; Dh8.21) per share, but an independent financial adviser set the fair share price at 22.93 pounds.
A deal of this size would help revive Egypt’s equities market after years of stagnation following the 2011 overthrow of Hosni Mubarak. But analysts had been doubtful it would go through as planned since the adviser had put the fair share price above the offer price. “The [Beltone] board is meeting to discuss whether to agree to buying the offered amount or not,” said a source at Beltone, that asked to remain anonymous.
Yesterday, the last day of the offer period, traders said the bid consortium attracted offers for 54.4 million shares at 16 pounds.
EFG Hermes is one of region’s biggest investment banks, with operations in Egypt, Saudi Arabia, the UAE, Kuwait, Jordan, Lebanon, Oman and Qatar.
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.
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.
Shares in EFG Hermes closed at 15.55 pounds, up almost 2 per cent, while Beltone’s shares shot up almost 4 per cent to 30.50 pounds.