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Thursday, 13 December 2018

Sawiris’ OIH to acquire 30% of Sarwa in 5 business days after EGX tender

M&A WATCH- OIH set to acquire 30% of Sarwa: Naguib Sawiris’ Orascom Investment Holding (OIH) is set to acquire 30% of Sarwa Capital in a EGP 1.59 bn transaction that values the structured- and consumer-finance player at EGP 7.36 per share, according to reports in Al Mal and Al Borsa. (While each of these outlets cite an EGX statement, we haven’t been able to find a copy of said statement ourselves on the EGX website or through its mailing list.) Sarwa shares closed at EGP 7.24 yesterday. OIH attracted sell offers for as much as 36.5% of Sarwa (or about 98% of all floating shares) after a 10-day voluntary tender offer. Execution of the transaction will leave Sarwa with a freefloat of 7%; OIH has five business days in which to close the acquisition.

Background: OIH launched the tender on 27 November after winning approval from the Financial Regulatory Authority to seek a non-controlling stake in Sarwa. The conglomerate said it could either acquire 30% (c. 216 mn shares), at a price of EGP 7.36 per share or between 20-30% (144-216 mn shares), at a lower price of EGP 6.62 a share. OIH CEO Tamer El Mahdi said at the time he was looking for at least 25%.

A complicated nexus: One day after OIH requested the FRA’s approval to pursue the stake, the authority ordered a six-month suspension of the investment banking arm of Beltone Financial, which is owned by OIH and which was the sole global coordinator and bookrunner on Sarwa’s IPO.

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