Cairo: EFG-Hermes Holding is exiting its stake in a Lebanese commercial bank in a deal valued at about $492 million (Dh1.8 billion).
The biggest listed Arab investment bank is selling 9.4 million shares of Credit Libanais, representing about a 40 percent stake, at $33 dollars each, to a group of Lebanese and Arab investors, it said in a statement on Thursday. That transaction has a deadline of June 30. It will also sell the remaining 5.5 million shares that it indirectly owns in the bank by May 2017 at the same price through an underwriting agreement.
The deal, subject to regulatory approval, comes as EFG-Hermes faces growing competition in its home market of Egypt and considers entering new frontier markets. Billionaire Naguib Sawiris is combining two investment banks to challenge the Cairo-based bank’s market dominance. Over the past year, EFG-Hermes has started a leasing business and acquired a micro-financing company.
EFG-Hermes said the sale is being made amid a challenging environment.” It had bought a 65 percent stake in Credit Libanais for $542 million in 2010. The stock surged 16 percent as of 12:18pm in Cairo to the highest intraday level in eight months.
Diversify
“The main trigger is that they found a buyer for the bank. It’s in Lebanon and very few players were interested in buying it,” said Harshjit Oza, an analyst at Naeem Holding. The proceeds should help the group pursue further on its growth opportunities, Naeem said in a research note earlier on Thursday.
The bank is looking for ways to diversify its sources of revenue through expansion into markets that include Africa, Chief Executive Officer Karim Awad said in an interview in Dubai earlier this month. The Cairo-based company has a very healthy pipeline of possible initial public offerings to manage in Egypt and the UAE, he said.
