Actis To Pay $244 Million for 9.3% of Egypt’s CIB

CAIRO (Reuters) – Private equity firm Actis has agreed to pay $244 million to acquire a 9.3 percent stake in Commercial International Bank (COMI.CA) (COMIq.L), Egypt’s largest lender by market value, Actis said on Wednesday.

Actis, which invests in emerging markets, said it would acquire 27.3 million CIB global depositary receipts at a price of $8.93 per share, just above Tuesday’s closing price of $8.68. It said it believed CIB had “excellent growth potential”.

CIB said it welcomed the move as the bank accelerates its growth in consumer banking.

Radwa El-Swaify, senior banking analyst for Beltone Financial, said the deal was “close to the market price and to analysts’ valuations, which we think is a fair deal”.

Actis said the transaction — to buy 50 percent of a stake held by a consortium led by U.S. group Ripplewood Holdings — would make it the largest single investor in CIB.

“Within Egypt, CIB is the market’s leading bank, perfectly positioned to achieve significant growth by extending its services into the retail banking sector,” Actis Senior Partner Paul Fletcher said in a statement.

EFG-Hermes Investment Banking, which acted as financial adviser to Actis on the deal, said it was the largest merger and acquisition transaction in Egypt for the year.

Separately, Belgian holding firm RHJ International (RHJI.BR) will sell part of its 3.2 percent stake in CIB, an RHJ spokesman said.

RHJ’s entire 3.2 percent stake in CIB is worth about 430 million Egyptian pounds ($77 million) based on CIB’s current share price of roughly 46 pounds. RHJ is run by the founder of Ripplewood.

Shares in CIB dipped 5.1 percent on news of the Actis deal to 46.50 pounds by 1002 GMT.

The purchase “might have sent the impression that this is the fair value of the bank and caused people to sell to take profits,” Beltone’s Swaify said, adding that Ripplewood’s willingness to sell may have also sparked some negative sentiment.

(Reporting by Cynthia Johnston and Patrick Werr in Cairo and Ann Jolis in Brussels; Writing by Cynthia Johnston; Editing by Jon Loades-Carter and Elaine Hardcastle)