(AFP Photo)
By Mohamed Ayyad
The Egyptian Financial Supervisory Authority (EFSA) has approved the optional purchase bid for 20% shares of EFG-Hermes through a Naguib Sawiris-led coalition, said Karim Awad, CEO of Hermes.
EFG-Hermes said on Wednesday that it appointed HC Securities and Investment as an independent financial advisor to evaluate its shares. It will also help shareholders assess the attractiveness of the offer made by businessman Naguib Sawiris and his company, Beltone Financial.
Hermes added: “The results of the evaluation and opinion of the Council will be announced immediately after it is prepared.”
“We are now busy following up with implementing the deal in the interest of the group and its shareholders,” Awad said, adding, “The stock exchange management suspended trading for shares of Hermes at the beginning of Wednesday’s trading session after the Authority’s announcement agreeing to the purchase offer.”
Hermes shares rose 6.8% on the stock exchange to EGP 14.06 before trade was stopped after the announcement.
HC Security confirmed to the Daily News Egypt that they were chosen as the sole financial advisor for the deal, adding that they will begin the evaluation soon. They declined to provide further information on the evaluation.
The Supervisory said earlier this month that the New Egypt Investment Fund in Holland, a subsidiary company belonging to Sawiris, wishes to acquire 17.82% of Hermes. Beltone Financial hopes to acquire 1.09% and Beltone Capital Holding 1.09% as well at EGP 16 per share.
“The ball is now in the court of EFG-Hermes shareholders to implement the deal by offering their shares for sale,” said Mohamed Farid, Chairman of DCode Investment.
He added that the near future will be characterised by communication between board shareholders and HC to determine the attractiveness of the share value.
According to Farid, who served as Deputy Chairman of the Egyptian Stock Exchange, “Of course, the Sawiris Beltone alliance to buy 20% of Hermes valued at EGP 16 per share came as a result of Hermes applying profitable ideas that raised the stock value over EGP 16.”
He confirmed that HC’s evaluation will take into account the value proposed by the coalition, the value possibly differing from the 16 EGP.
Farid said that the coalition’s insistence on purchasing 20% of Hermes confirms its willingness to actively participate in the Board of Directions and take decisions.
“Acquisition activities in Egypt are weak and they do not exercise a strong influence on the market. Over the past three years, we only saw two acquisition deals: Electrolux’s acquisition of Olympic group 2011 and the Qatar National Bank Deal,” said Farid.
Beltone is one of the largest financial institutions in Egypt, followed by about 17 companies specialized in investment, asset management, securities, and underwriting coverage. Beltone’s market value is worth EGP 216.6m, while Hermes’ market value is worth EGP 8.063bn.
“Egyptian companies’ interest in Hermes is a positive thing. The question for those purchasing, namely Sawiris and Beltone, is: what is the goal of owning 20%?” said Hisham Tawfiq, President of Arabiya Online and Board Member of the Stock Exchange.
“Those providing the offer stipulate that the entire share must be purchased in order for it to be completed,” said Sherif Samy, Chairman of the Financial Supervisory Authority, to Reuters.
The Authority’s approval for the tender offer to be published means permission to initiative measures like setting a date to open market operations on the stock exchange for a specified period of time in order for the shares of shareholders who wish to sell to be received.
The value of the deal at the value provided in the offer is EGP 16 per share, a total of EGP 1.835bn.
