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Thursday, 1 November 2018

Orascom Investment wants at least 25% of Sarwa Capital

** #3 M&A WATCH- Sawiris’ Orascom Investment wants at least 25% of Sarwa Capital: Orascom Investment Holding (OIH)is looking to acquire a non-controlling stake of c. 216 mn shares in consumer and structured finance player Sarwa Capital at EGP 7.36 a share, the company said in a bourse statement (pdf). The company has filed for regulatory approval on the voluntary offer and has also expressed willingness to buy a smaller stake of 144-216 mn shares, but only at EGP 6.62 per share — a 10% discount to its price at the opening bell in its EGX debut last month, according to a statement from the FRA (pdf), which is studying OIH’s bid. OIH CEO Tamer El Mahdi told Bloomberg that “we’re looking to have something more than 25%,” adding that “we believe the price which is currently in the market is very attractive for OIH.”

The move is in line with OIH’s strategy to expand in the retail finance sector, which the firm sees growing as the economy continues to improve, El Mahdi also said. “The company fundamentals are very strong, and we have no concerns in terms of the stock’s performance since the IPO.”

The market reacts: Sarwa Capital’s shares jumped 10% after OIH’s announcement, closing at EGP 6.17 on Wednesday. The company’s shares had closed down more than 11% in their EGX debut amid the same Emerging Markets Zombie Apocalypse that shortly after prompted the government to delay its own share-sale plans. The EGX decided yesterday to raise the price limit on Sarwa’s shares to EGP 7.36 / share for a five-day window starting today. Reuters also has the story.

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