CAIRO: In the latest chapter of the saga of Omar Effendi, Egyptian businessman Mohamed Said El-Hanash has offered LE 2 billion for the nation s largest department store.
The offer from El-Hanash emerges nearly one week after the Ministry of Investment told The Daily Star Egypt that the sale of the retail giant to the Saudi Anwal Group has been finalized.
Subsequent to the receipt of the offer from El-Hanash, Hady Fahmy, chairman of the Holding Company for Trade that owns Omar Effendi, says that the offer cannot be ignored.
Although the board of directors of the holding company approved Anwal s offer last week, Fahmi says that a number of steps still need to be taken in order to finalize the deal. These include obtaining approval from the general assembly of the holding company.
El-Hanash s offer is more than twice as much as Anwal s. The Saudi clothing retailer initially offered LE 504 million to purchase Omar Effendi, but after months of negotiation with the government this was increased to LE 655 million as well as LE 50 million for the earlier retirement of 1,200 workers and a commitment to spend LE 200 million to upgrade the company s infrastructure.
If you want to buy a company where the going bid is some LE 900 million, you would offer, say, LE 1 billion or so; you wouldn t offer LE 2 billion. The offer does not make economic sense, says economist Abdel-Fattah El-Gibali of Al-Ahram Center for Political and Strategic Studies.
The new offer is also higher than most previous estimates. It is even well above the value of LE 1.14 billion determined by a group of dissident executives from Omar Effendi s sister companies.
This group was led by Yehia Abdel-Hady, head of the state-owned Benzione, who filed a complaint against the government in March in an attempt to block the sale to Anwal.
El-Hanash himself insists that he is serious about his offer and has threatened to complain to the attorney-general if his offer is ignored, according to the daily newspaper Al-Masry Al-Youm.
He can do what he wants. There is a law. The situation is now with the general assembly of the [holding] company and everything else is proceeding as normal, says El-Gibali.
El-Hanash was given until Thursday to deliver a LE 40 million bid bond that will confirm the sincerity of his offer, but the bid bond was not yet delivered to the holding company at the time of publication.
Nothing has been received until now, says Tamer Hussein, an economic analyst at the Ministry of Investment.
Despite El-Hanash s verbal resolve, his intentions are unclear and he appears to be far removed from the bid process that began in February.
El-Hanash resides in Saudi Arabia where he owns the construction business Said Contractors.
I am not convinced by him, because it is not possible for someone to offer LE 2 billion without knowing anything about what he is buying. He didn t even ask for the conditions of the tender, says El-Gibali.
Nevertheless, Hady will be in an awkward position if the bid bond is delivered, having completed months of negotiation with Anwal and received approval from the board of the holding company and the government committee that oversees the sale of state assets as well as the endorsement by parliament of the method of valuation.
But Anwal remains reticent.
We are not a party to this situation. If [El-Hanash] is serious, then we wish him luck, says Anwal s Financial Advisor Magdy Tolba.
El-Hanash may be motivated by patriotic sentiments, but unless this sentiment is backed by a material commitment in the form of a bid bond, his offer is only a symbolic and insignificant obstacle to Anwal’s acquisition of Omar Effendi.
