One M&A battle, one MBO, three new PE / VC investments and an IPO — an excellent way to end the second week of Ramadan

French Foreign Minister Jean-Yves Le Drian is arriving in Cairo today for talks with President Abdel Fattah El Sisi, Foreign Minister Sameh Shoukry, and Defense Minister Sedki Sobhi, Al Masry Al Youm reports. Expect the situation with Qatar to be rather near the top of the agenda.

The M&A battle of the year heated up yesterday as Cairo Three A Group offered EGP 45 per share of the National Company for Maize Products, trumping a rival offer from global giant Archer Daniels Midland. We have more on this and run of other exciting news from the buyout and private equity worlds in Speed Round, below, including three commitments from PE / VC outfits and a rare management buyout.

Those of you fasting today out of religious duty aren’t the only ones going without food. Some nutters in Silicon Valley — including the former boss of Evernote — are doing fasts as long as eight days to lose weight, CNBC reports. The catch: Drink as much coffee, tea and water as you want. Nerd Fitness has a primer on “IF” (as intermittent fasting is known), while former Men’s Health editor Peter Moore has literally written the book on the so-called “eight-hour diet” version of IF.

The only thing Qatar has ever done for us: Visitors to Enterprise’s website are up more 16% this week over last.

So, when do we eat? Maghrib prayers are at 6:55pm CLT in Cairo, and the cutoff time for sohour is 3:08am.

With Amr Adib off the airwaves last night, CBC’s Extra News was the only other show to offer anything of substance — mainly on the issue of land reclamation.

The government processing over 17,000 requests from people and companies who want to acquire (or re-acquire) some of the 1.7 mn feddans of state land reclaimed in a recent government campaign,a government spokesman told the news show. (Watch, runtime: 7: 34).

Assiut Governor Yasser El Dessouki also phoned in to say that authorities in his governorate have seized around 4.7 mn sqm of land in 43 separate cases (watch, runtime 10: 14).

M&A WATCH- The year’s hottest bidding war is still going strong, with Cairo Three A Group presenting a mandatory tender offer to acquire National Company for Maize Products (NCMP) at EGP 45 per share, according to Al Borsa (or check out the official word from EFSA in pdf). That trumps an earlier bid of EGP 35 per share from Archer Daniels Midland (ADM)’s Swiss unit. The companies are bidding for Misr Capital Investment’s 42.96% share in NCMP and are required by law to submit MTOs. Also in the running are Al Mona Misr (a local affiliate of global commodities giant Louis Dreyfus, which says it is not acting on Dreyfus’ behalf) and a subsidiary of EK Holding. Pharos Holding is sell-side advisor to Misr Capital Investment, while Al Tamimi & Co. is legal advisor. EFG Hermes is advising ADM, CI Capital is advising Cairo Three A, and Al Mona is being advised by Pioneers.

M&A WATCH- The Modern Waterproofing Company’s management team is seeking regulatory approval from the Egyptian Financial Supervisory Authority to acquire 100% of the company. The offer is priced at the fair value assessment of between EGP 0.73 and EGP 0.80 per share, according to an EGX filing. With 119 mn shares in play, that would imply a ticket price in the EGP 87-95 mn range. Management buyouts (or MBOs, as they’re known in finance circles) are entirely too rare in Egypt — we report on an average of about one a year, and one of the last three was of an Egypt-focused (not Egypt-based) company. Recent examples include Pharos Holding’s management buying out Qalaa Holdings’ stake (2015); the management team at Discover Egypt buying the firm from All Leisure Group (2016); and Accelero Capital’s management team buying back shares held by OTMTI, at the time its largest shareholder (2017)

IPO WATCH- Our friends at BPE Partners could list on the EGX in September or October. That’s according to Al Borsa’s coverage of remarks by Chief Investment Officer Abdel-Monem Omran yesterday. The company will be looking to raise fresh capital through its initial public offering and had said last year that it would be offering at least 10% of its shares on the EGX.

INVESTMENT WATCH- The nice people at Tanmiya Capital Ventures (TCV) will announce next week an investment in an unnamed agriculture company, managing partner Youssef Ayoub tells Al Borsa. Ayoub did not disclose the size of the investment, but said the company exports c. 70% of its annual production. TCV intends to invest USD 12 mn in five companies this year, including in the health sector, he added. TCV reached first close on its maiden midcap fund in March and has previously said it would invest EGP 250-300 mn this year. The company recently announced it had struck an agreement to source finance for its portfolio companies from the Bank of Alexandria.

INVESTMENT WATCH- Dubai-based Numu Capital is investing an unspecified sum in social video analytics dashboard Mintrics, Numu said in a statement (pdf) without giving further details of the transaction. Mintrics was founded about a year ago by Egyptian tech veterans Tarek Nasr and Tarek Shalaby and provides detailed analytics on videos posted to Facebook, YouTube, Twitter, and Instagram. “The seed investment from Numu Capital will go towards Mintrics’ aggressive global expansion plans and further development of the technology,” the release said.

INVESTMENT WATCH- Healthcare startup Vezeeta has landed a USD 500k investment from Endeavor Catalysts, marking the first investment in Egypt by the entrepreneurship network’s co-investing arm, the group said in a recent email. Vezeeta, which recently closed a USD 10.5 mn funding round after raising USD 5 mn in a series ‘C,’ provides online booking to connect patients with doctors. The investment comes as Vezeeta looks to expand in Jordan and Lebanon. Vezeeta was one of the three Egyptian companies listed in the World Economic Forum and International Finance Corporation’s “100 Arab startups shaping the fourth industrial revolution.”

In other news from Endeavor, the company selected Alexandria-basedRasheed Performance Minerals (RP Minerals) as an Endeavor entrepreneur at its latest international selection panel held in May at Canary Warf, London. RP Minerals “mines, selects and processes minerals to serve various applications such as oil & gas drilling, water drilling, tunneling and horizontal directional drilling, foundry, paper production, ceramics and cat litter.” The company exports worldwide.

Arqaam Capital is partnering with Marco Polo Securities to serve US-based institutional investors seeking to capture growing investment opportunities in Egypt, the company said in a statement yesterday (pdf). The Marco Polo platform “enables the global trading of exchange listed securities as well as international distribution of locally originated private placements and M&A products.” Arqaam COO Dennis Wijsmuller says the partnership “will work towards providing US based investors with Arqaam’s thought-provoking and value added research, along with corporate access and seamless execution in the Egyptian equity markets.” The news is the latest sign of intensifying competition for the trading business of US funds with an interest in Egypt: Beltone Financial acquired a majority stake in Auerbach Grayson last year and EFG Hermes poached Wall Street veteran Karim Baghdady to head its new US office.

Fuel subsidies in the FY2017-18 budget have not changed: The amounts earmarked for energy subsidies in the FY2017-18 budget have not changed since the original announcement last month, Vice Minister of Finance Mohamed Maait said on Wednesday, according to Al Mal. The budget allocates EGP 140 bn to energy subsidies, with EGP 110 bn of that figure earmarked for petroleum products and EGP 30 bn for electricity. Mait’s comments come in reference to a statement from Prime Minister Sherif Ismail earlier this week suggesting that the government’s energy bill could amount to EGP 225 bn with EGP 145 bn on fuel subsidies and EGP 80 bn on electricity.

The government could be spending up to EGP 225 bn if it postpones energy price hikes slated for July this year, a Finance Ministry official tells Al Shorouk. He explained that amendments to the budget are now under the sole jurisdiction of the House of Representatives, since the Ismail cabinet has already passed it over. The heads of the House’s economics and budgeting committees both confirmed, however, that the budget remains unchanged so far.

It looks like the House will postpone its summer recess: The House of Representatives’ majority bloc, the Support Egypt Coalition, decided on Wednesday to postpone MPs’ summer recess to mid-July from its original 30 June date, coalition spokesperson MP Ahmed Zeidan tells Al Borsa. The House will still have to vote to postpone their summer vacation, but MPs have a backlog of key economic legislation to push through — at the head of which is next year’s budget. MPs are also still waiting to hear back from the government on a draft bill to govern “private funds,” Zeidan said.

Also on the House’s agenda are increases to government service fees, on which the Budgeting Committee is set to begin deliberations on Monday, Al Borsa says. MPs received the law in April but had postponed discussions.

In other legislative news, the Egyptian Council of State finished reviewing the Consumer Protection Act on Wednesday and will be sending it to the Ismail cabinet next week, unnamed council officials tell Al Borsa. The council has also sent the revised Mineral Resources Act and amendments to the 1941 Commercial Fraud Law to the cabinet for a final look before referring them to the House for a vote.

The executive regulations governing the Investment Act will be ready before the upcoming Eid holiday, Investment Minister Sahar Nasr said on Wednesday, according to Al Shorouk. Nasr’s comments came during a meeting seeking input from representatives of businesses operating in private sector-run free zones, according to a ministry statement. Private free zones — which were brought back to life with the new Investment Act — have attracted some USD 11.5 bn in total investment and bring in about USD 4 bn a year from exports, Private Free Zone Investors Association head Moatassem Rashed told the minister. The head of the Taba and Nuweiba Investor Association, Samy Soliman, said that he hopes to see a private free zone established in the area, according to Youm7.

Qatar smackdown day 3. (Or: The best Ramadan soap opera we’ve ever watched.) Turkey’s parliament approved a bill allowing its troops to be deployed to a Turkish military base in Qatar, largely supported by MPs from the ruling AK Party (AKP) and the nationalist opposition group MHP, according to Reuters. AKP lawmakers had proposed “debating two pieces of legislation: allowing Turkish troops to be deployed in Qatar and approving an accord between the two countries on military training cooperation.” Meanwhile, the AKP’s pals in the Ikhwan came out with a statement yesterday denying Saudi Arabia’s accusations that it is a terror group and called on the kingdom to stop supporting President Abdel Fattah El Sisi, the news wire said.

Turkey’s escalation came as France said it would not be taking sides in the row, but added that Qatar “must be completely transparent and answer its neighbours’ questions,” the government’s spokesman said. Late to the party is Comoros, which announced it was severing its diplomatic ties with the statelet, Al Shorouk reported. Djibouti also announced on Wednesday that it would downgrade its diplomatic relations with Qatar.

The pucker factor escalates: Yesterday’s diplomatic wrangling came as one official in Doha told Reuters there were enough grain supplies in the Statelet to last for four weeks “and that the government also had large strategic food reserves. But talks were underway to ensure supplies… brought in through Qatar Airways cargo flights.”

Give Qatar love, go to jail: The UAE has “tightened the squeeze” on Qatar further still, threatening penalties of up to 15 years in prison and fines of up to AED 500k on anyone who publishes any expression of sympathy towards Qatar “whether it be through the means of social media, or any type of written, visual or verbal form.” The penalties come under the UAE’s 2012 cybercrime law, Bloomberg notes. The UAE also banned all Qatari nationals from even transiting UAE airport and said foreigners with Qatari residence visas would be denied visas on arrival to the UAE. Reuters notes that the “transit ban on Qataris is stricter than restrictions on Israeli passport holders, who are allowed up to 24 hours to change planes at UAE airports.” Senior officials suggested that more restrictions on business could be in the works, Reuters reports.

Fingers point to Russia for alleged Qatar News Agency hack: In another twist to the drama, Qatari and US officials believe Russia was involved in the so-called “hack” alibi Qatar is using, according to CNN. President Vladimir Putin’s spokesperson Dmitry Peskov angrily rejected the allegations, AP reports.

US President Trump offered to help to help the parties resolve their differences, including through a meeting at the White House if necessary, according to a statement from the White House.

Some banks in the UAE, Saudi Arabia, and Bahrain are already cutting their exposure to Qatar, according to Bloomberg. “Some lenders in these countries have started withdrawing deposits from Qatari banks and stopped trading riyals and bonds,” sources said. Arqaam Capital analysts Jaap Meijer and Michael Malkoun reiterated that QNB Alahli Bank remains a “stand alone operation”and added that only 4% of QNB loan book originated in Egypt. The entire ordeal has led to a downgrade of the statelet’s credit ratings by Standards & Poor’s one notch to AA- from AA and suggested a significant chance of a further downgrade, Reuters reports.

Beyond banking, LNG trading house Trafigura said the regional spat has not yet had an impact on Qatar’s gas exports. “It’s much too early to say if there could be a disruption … The LNG market is an oversupplied market … the main focus is to secure customers … Egypt has been a very good business for us – both on the gas and products side. Last year we had a very significant market share in Egypt. It is lower this year. It’s a profitable business but not without a risk, credit risk,” CFO Christophe Salmon told Reuters. The situation is giving recruiters and contractors a “headache,” Recruiter says, with David Leyshon, chairman of Surrey-based technical recruiter CBSbutler, saying “Qatar has about 180,000 Egyptian nationals … future hiring and continuity of employment will undoubtedly suffer if the situation isn’t resolved quickly.”

Regarding the transfers back from those expats, there are no problems or restrictions on Egyptians’ remittances from Qatar, CBE Sub-Governor Tarek Fayed told MENA news agency, according to Al Masry Al Youm.

Naguib loses four-year old legal battle against Algerian government: An international court on Wednesday rejected OTMT Chairman Naguib Sawiris’ c. USD 4 bn claim against the Algerian government over the ownership of national Algerian mobile operator Djezzy, CNBC Arabia says. Sawiris’ Orascom Telecom will also be footing 50% of the Algerian government’s legal bills for the case (estimated around USD 3.5 mn), which has been ongoing for some four years, according to the verdict. Orascom reportedly declined to comment on the verdict.

Majid Al-Futtaim (MAF) is the frontrunner in the bid for a controlling stake in French hypermarket chain Geant, with the transaction value likely to reach USD 500 mn, Bloomberg reports. MAF, which operates Carrefour stores in the Middle East, is competing with Saudi Arabian retailer Bindawood Holding. Geant had hired BNP Paribas SA to advise on the sale.

If you’re feeling as worn-down as we are this morning at the near-midpoint of Ramadan, take heart that there are only four stories the outside world is talking about this morning, and they’re all big:

1- All things Qatar, from the news that Egypt, Saudi and the UAE are now making clear (behind the scenes) their list of demands for normalization to the lunatic in Turkey deciding it would be a good idea to send troops.

2- Daesh claimed responsibility for two simultaneous attacks in Tehran yesterday. The terror attacks are believed to have been the group’s first in Iran, Bloomberg reports. Tehran is blaming Riyadh for the attacks on Iran’s parliament and the mausoleum of Ayatollah Ruhollah Khomeini, which killed 12. Reuters has solid coverage and the New York Times has visual extras on how the attacks unfolded. Saudi Foreign Minister Adel Al Jubeir denied the accusations.

3- America will grind to a halt this morning and flip on TVs / open streams when former FBI Director James Comey testifies before Congress at 10am Eastern (4pm CLT) about “a wide-ranging effort by President Trump to influence the F.B.I.’s investigation into Russia’s meddling in the election.” The testimony will be live streamed on the New York Times website. Get your Comey fix now from the Times or from Politico. The testimony is already being mentioned in the same breath as Iran-Contra and Anita Hill, and Politico has a look at other dramatic moments on the Hill including Watergate and the Church Committee.

4- The UK heads to the polls this morning in a snap election called by Prime Minister Theresa May as she sought a clear mandate to negotiate Brexit terms. FiveThirtyEight marshals a lot of mumbo-jumbo to suggest anything could happen, while the Independent is slightly inclined to give it to May’s conservatives. Both pieces are great if you’re politics junkies.

The antidote to all of this politics: A discovery in the Arab world has re-written what weknow about the origins of Homo sapiens. A cache of the oldest-known Homo sapiens remains have been found in Morocco, and they’re about 100k years older than the what were, until now, the oldest-known remains. “We did not evolve from a single ‘cradle of mankind’ somewhere in East Africa,” said the leader of two studies of the fossils published yesterday in Nature. “We evolved on the African continent.” NPR has great coverage.

The US is still considering expanding its ban on in-cabin electronics. The country’s homeland security boss was found mumbling about the topic on the Hill yesterday. Up to 71 unspecified airports could be affected, Bloomberg reports.

Reactions to the blockade of Qatar are still topping coverage of Egypt in the foreign press this morning, with Bloomberg shifting the discussion to Russia’s alleged role. A piece by Leonid Bershidsky dismisses the notion that Russia had anything to do with hacking Qatar News Agency. The move would be antithetical to Russian interests, which maintains good relations with Qatar, and is trying to prove a reliable partner to Saudis on OPEC production cuts, not to mention cordial relations with Egypt. Russia’s dilemma was explored further by Henry Meyer, and Bloomberg’s editorial board took it a step further and issued a call to ease up on Qatar, as this might drive it into Iran’s arms.

The EGP is “overvalued” and “no longer floats freely,” Patrick Werr claims in The National. He says a “new currency crunch may be inevitable in the coming few weeks when the central bank eases restrictions on transferring money out of the country.” Werr says the EGP is getting “less and less convertible” and cites the refusal of his bank, Emirates NBD, to renew his USD 6 NYT subscription as evidence. Setting aside our inability to get as good a price on an NYT sub as Werr (the best we can find is an introductory offer of USD 7.52 or so a month, and we’re paying USD 35 for our package), Werr’s claim runs counter to multiple reports of Egyptian banks dropping restrictions on the use of credit cards abroad and on the internet. We’ve recently used credit cards from three different banks to settle online purchases and have made transfers abroad in the last couple of days without a hitch. Werr is a writer with a wide audience in ENBD’s home market — someone from customer service might want to give him a ring if the claim holds up.

The KGB helped ignite the Six-Day War, Ronen Bergman writes in the New York Times. “The heads of the KGB were deeply anti-Semitic, and saw in Israel and world Jewry ‘a danger which is only second to the main enemy, the United States.’ The K.G.B. was intent on destabilizing Israel, totally disproportionate to the country’s strength or influence. In April 1967, as the United States was making gains in Vietnam, the Soviets decided to undertake dramatic Active Measures to weaken Israel — and thereby also [deliver] a blow to the Americans. By conveying false information, the Soviets hoped to increase Syrian and Egyptian dependence on Moscow and deepen Egypt’s involvement in the Middle East’s tensions by making the Egyptians flex their muscles against Israel,” Bergman writes. He says now “Russia is back, again playing a destructive, diabolical role in world politics.”

Also worth noting this morning:

• Egypt “needs to stop the onslaught against civil society,” says Transparency International in their latest piece.
• President Abdel Fattah El Sisi would not win the 2018 presidential elections if they are held fairly, human rights lawyer and former presidential candidate Khaled Ali tells Reuters’ Ahmed Aboulenein.
• The Nile delta is disappearing due to climate change and rising sea levels, writes former British diplomat and one-time Shell International head of security Ian McCredie for Fair Observer.

• The International Finance Corporation is looking to help finance a 50 MW solar plant being developed in Egypt by Shapoorji Energy, VCCircle Network says.
• Improvements in Egypt’s economic metrics means that the country “isgradually finding its feet,” says the latest report from Focuseconomics (Paywall).
• Niemen Lablooks into Mada Masr’s new membership program which says will help it maintain its editorial independence in challenging times.

The next step in the land reclamation saga is for the government to formulate a clear plan for how it wants to make use of the nearly 2 mn feddans of land it has retaken, Mohamed Amin writes for Al Masry Al Youm. The state needs to make clear both a pricing system and regulations for the use of the land, he writes. While Amin lauds the authorities for moving quickly on the campaign, he points out that it is their laxity that led to the problem in the first place.

What sets Egypt apart from other nearshore destinations in Europe is the possibility of implementing service centers on a meaningful scale, “like the Philippines and India,”the Outsourcing Destination Guide Egypt suggests. The Outsourcing Destination Guide Egypt is an independent information guide created by German Outsourcing Association in cooperation with the Information Technology Industry Development Agency . The Guide includes reports on information technology outsourcing, business process outsourcing, and the shared services industry in Egypt, with a list of company profiles and contacts for service providers. There are also case studies including Raya’s Contact Center (newly listed on the Egyptian Exchange), DELL EMC’s Egypt Center for Excellence, and Microsoft’s Advanced Technology Lab in Cairo.

Parliament to send delegation in DC to lobby against the Ikhwan, support for NGO Law: A delegation from the House of Representatives will be in DC on Saturday to lobby members of Congress to support a bill designating the Ikhwan a terrorist organization, Ahram Online reports. MPs will also hope to sway views on the recently ratified NGO Act, which three Republican senators had previously slammed as “draconian” and “repressive.”

President Abdel Fattah El Sisi met yesterday with Burkina Faso’s President Roch Marc Kaboré, according to an Ittihadiya statement. El Sisi urged Kaboré to look into investing in Egypt’s infrastructure and energy projects. Kaboré is scheduled to meet with the Union of Egyptian Investors Association today to discuss investment opportunities, Al Shorouk reports.

New anti-dumping steel tariffs imposed on China, Ukraine, and Turkey came into effect on Tuesday, the Trade and Industry Ministry said on Wednesday, according to Reuters. They will be imposed for a four month period.

Egypt is one of six countries where renewables are becoming the least expensive option, according to a report by renewable energy policy network REN21, The Statesman reports. Renewable energy in Egypt, India, Denmark, Mexico, Peru and the UAE is being delivered at USD 0.05 per kWh or less. “The renewable cost is well below equivalent costs for fossil fuel and nuclear generating capacity in each of these countries,” the piece reads. Renewable energy investment fell by 30% y-o-y to USD 116.6 bn in developing and emerging markets, compared with a 14% y-o-y decrease to USD 125 bn in developed countries.

Egypt repaid Dana Gas USD 40 mn that were overdue, CEO Patrick Allman-Ward announced. The payment, which came as part of the USD 750 mn Egypt paid IOCs, brings repaid debts by Egypt to Dana Gas in 2017 to USD 135 mn. Dana Gas says it is still owed USD 187 mn from Egypt. Dana Gas shares, which have been had fallen by one-third this year, had risen 11% on yesterday’s trading on the news of the repayment, The National’s Anthony McAuley writes.

The Egyptian government can appeal an administrative court’s decision to return to a zero-tolerance policy on ergot in wheat imports, but the decision will have to be implemented during the appeals process, Khaled Ali, one of the lawyers who brought up the case, tells Reuters. If this is true, the government may be forced legally to implement zero-tolerance from 13 June, when the official announcement of the verdict will take place. The decision, which we noted yesterday, is already throwing confusion among wheat traders.

Philip Morris International (PMI) will pay about USD 100 mn in dues to Eastern Company by the end of June, government relations managers Ahmed El Sharkawi said, according to Al Shorouk. Eastern Company had reached an agreement with PMI to get it to pay back its dues dating back to July 2016 in EGP-equivalent.

Heliopolis Company for Housing & Development is considering offering 193 feddans to be co-developed with a partner to build a services complex, according to an EGX filing. The land plot is on Cairo-Suez Desert Road and the development aims to serve the New Heliopolis project. It is set to include healthcare, education, entertainment, and commercial facilities.

There were 9.4 mn registered vehicles in Egypt as of the end of 2016, according to a CAPMAS report. Some 2.3 mn of the registered vehicles were in Cairo, 1.1 mn in Giza, and 622.2k in Alexandria. Other remaining 4.7 mn cars registered nationwide, 373.5k are taxis.

Careem Egypt CEO Ramy Kato discussed expanding in Egypt and industry regulation with Investment and International Cooperation Minister Sahar Nasr yesterday, according to a ministry statement.

The Supreme Media Council decided during its meeting yesterday to impose a 200k fine on satellite channels and other media outlets “that broadcast material violating public morals.” The council will also revoke the outlet license if the offense is repeated three times within a six-month period, Ahmed said. According to Zakareya, citizens who report such material with video evidence will receive a 10% cut of the fine. The council will also draft a binding code of ethics for members of the press and media syndicates on how to report on controversial Arab issues, Ahram Online reports.

The Sisi administration thinks it can net some EGP 65 bn from the sale and rental of property it has confiscated as part of a drive to reclaim state land that was being used illegally or by squatters, according to a report by Al Borsa yesterday. The state has recovered some 1.7 mn feddans so far, Prime Minister Sherif Ismail said at a conference earlier this week.