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Wednesday, 3 October 2018

State unveils how it will price stake sales under privatization program

**#2 State unveils how it will price stake sales under privatization program: Investment bankers hired to dispose of stakes in already-listed state-owned companies have guidance from cabinet on how to price their offerings. Ministers have approved an indicative pricing scheme that will see shares go to market within 10% of their average price on the EGX in the previous 30 days, Public Enterprise Minister Hisham Tawfik tells Al Mal. Cabinet agreed to the 10% up or down formula after the EGX was buffeted in recent weeks by fallout from the EM Zombie Apocalypse, Tawfik suggested.

Retail investors to get a piece of Eastern? The newspaper also claims that individual investor will be given the chance to subscribe to this month’s sale of a 4.5% stake in retail favorite Eastern Tobacco. Expectation had previously been that the offering would be to institutional investors as part of an accelerated book build, by which investment bankers place the full stake with institutions over a 24-48 hour period with no publicity. EFG Hermes, which has a proven reputation on accelerated book builds across GCC markets, is quarterbacking the transaction, which is expected to go to market in the second half of this month. We were told as recently as Monday that the sale is still on track for execution before the end of October.

In other news from the privatization program: Citi wants work. That’s the take-home from a news conference yesterday with Citi MEA CEO Atiq Ur Rehman, who said the bank is hoping to help the Madbouly government drum up interest in upcoming transactions. We said on Monday that Citibank was reportedly one of seven bidders vying to run the upcoming sale of an additional stake in state-owned Alexandria Containers & Cargo Handling on the EGX. Other bidders include Pharos Holding, HC Securities, and Arqaam Capital. State-owned investment bank NI Capital is expected to make a decision soon, sources said.

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