** #5 M&A WATCH- Medhat Khalil considers forming consortium for EGP 500 mn take-private bid on Raya: Raya founder Medhat Khalil is putting together a group of investors to take Raya Holding for Financial Investments private via a mandatory tender offer (MTO) to acquire 100% of the company, Khalil told Al Mal in an interview on Thursday. Khalil estimates that he would need EGP 500 mn buy the outstanding 58% of Raya, noting that he would be forced to acquire at a premium.

Caught by surprise: Khalil confirmed reports that the Financial Regulatory Authority (FRA) had ordered that Khalil launch an MTO or sell off shares, saying that the order caught him by surprise. Khalil and family members control 32% of shares, less than the 33% required to trigger an MTO, he said. But the FRA decided to count the 10% stake owned separately by his brother-in-law as a related party, bringing the Khalil group’s total stake at 42%.

What’s next: Khalil said It was unlikely that he will sell any of his shares. This leaves him between the hammer of having to execute the MTO before the FRA’s deadline of 27 November, and the anvil of paying fines of up to EGP 1 mn, he said. He is currently studying legal options to address the MTO. He is also consulting with a number of investment banks, including EFG Hermes, to see what is the best way to go, he added.