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Wednesday, 10 April 2019

Medhat Khalil acquires 26.7% of Raya Holding shares in MTO

M&A WATCH- Medhat Khalil acquires 26.7% of Raya Holding shares in MTO: Raya Holding Chairman Medhat Khalil bought 26.7% (56.919 mn shares) of Raya Holding through his El Pharonia Real Estate Investment at a cost of EGP 314.76 mn in a mandatory tender offer (MTO) that ended on Sunday, the company said. The MTO kicked off on 11 March at EGP 5.53 per share, a slight premium to the EGP 5.35 at which it had last closed prior to the takeover bid.

This does not mean the company is being taken private: “We don’t have any intentions to delist from the stock market,” Raya Group CFO Hossam Hussein told Enterprise. “This was apparent in the proposal of the main shareholder in which he asked to buy 90% of the company’s shares — it was intentional to leave 10% of the company’s shares free-floating so that the company would continue to be on the exchange.”

What happens now? The group is expecting to push forward with its current plans, Hussein said. “Our future plans whether in Egypt or abroad will remain the same. Medhat Khalil is a main shareholder, but the board of directors comes up with companies’ plans and approves them.” Raya’s expansion plans will be focused on non-banking financial services, manufacturing and food production.

Background: The Financial Regulatory Authority (FRA) had ordered Khalil at the end of last year to submit an MTO for Raya or sell down his stake, arguing that he and related parties controlled a combined 42% of the company — a level of control that triggers the requirement for an MTO under securities regulations.

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