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Sunday, 10 June 2018

Could the potential SODIC-MNHD merger come in the form of a share swap?

M&A WATCH- SODIC-MNHD to take the form of a share swap? It appears that the potential merger between our friends at SODIC and Madinet Nasr Housing and Development (MNHD) could take the form of a share swap, as it is “the path of least resistance,” MNHD CEO Ahmed El Hitamy reportedly said in a statement to the local press on Thursday. A share swap agreement would be the least costly option, while maintaining the independence of both companies, he said, adding that from a procedural standpoint, the share swap agreement would be the easiest as well. How the merger will proceed will ultimately depend on the results of the studies and fair value reports being conducted by the advisers, El Hitamy noted. SODIC had appointed CI Capital and White & Case as its advisors, while MNHD tapped EFG Hermes and Zaki Hashem & Partners to advise it on the potential transaction. Talks between the two began in April. The combined land bank of both companies could be as large as 15.3 mn sqm.

El Hitamy’s statements came following MNHD’s signing on Wednesday of a EGP 1 bn five-year loan agreement with CIB to fund the development of a T-Zone and infrastructure at its Taj City project, according to a company release (pdf). The company’s board of directors had signed off on the facility last week. MNHD is in talks with an unnamed bank for additional financing for infrastructure at its Sarai development.

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