Reuters – EFG Hermes Attracks Buyout Interest

A group of investors and bankers has made a buyout approach to Egypt’s biggest investment bank, EFG Hermes. Egyptian share prices have tumbled since the uprising that ousted President Hosni Mubarak last year, and many investors have been looking to snap up assets seen as undervalued. EFG’s shares have more than halved in that time. The bank had a market value of $839.1 million at the close of trade on Wednesday, according to Reuters data.

(Reuters) – A group of investors and bankers has made a buyout approach to Egypt’s biggest investment bank, EFG Hermes.

 

Egyptian share prices have tumbled since the uprising that ousted President Hosni Mubarak last year, and many investors have been looking to snap up assets seen as undervalued. EFG’s shares have more than halved in that time.

 

The bank had a market value of $839.1 million at the close of trade on Wednesday, according to Reuters data.

 

Cairo-based EFG – which is in the midst of forming a joint venture with Qatar’s QInvest – released news of the approach in a letter to the Egyptian stock exchange on Thursday.

 

EFG, which has $4.7 billion in assets under management, said it received a letter expressing interest in a buyout – to be conducted via a stock exchange tender – from a new company, Planet IB Limited, on Wednesday.

 

That letter was signed by Ahmad Al Husseiny, until this month managing director and member of the board of Egyptian private equity firm Citadel Capital.

 

It said Planet was a special purpose vehicle to buy EFG’s shares and included a “group of Arab and Egyptian investors as well as a group of prominent Egyptian bankers and experts in financial markets and direct investment”.

 

Planet’s letter did not name the investors or give a target price for EFG shares and it was not clear how any buyout would affect the QInvest deal.

 

“We reveal this intention of ours … in our belief that the current share price is below the valuation that we made, based on published information and made public by way of the stock exchange,” Planet’s letter said.

 

It said the tender was contingent on Planet carrying out an appraisal and due diligence.

 

Any tender offer would require approval from the Egyptian regulatory authority but not from EFG management.

 

Husseiny joined Citadel Capital in 2005 after serving as director of investment banking at Barclays Bank Egypt.

 

EFG said in May it had an agreement to form a region-wide investment bank with Qatar’s QInvest, which would control 60 percent of the new bank and provide $250 million to increase its capital. (Reporting and writing by Patrick Werr and Tom Pfeiffer; Editing by David Hulmes)