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Wednesday, 20 November 2019

Egypt's FRA to Adeptio: Your Americana MTO offer shall not pass

M&A WATCH- FRA tells Adeptio: Your Americana MTO offer shall not pass: The Financial Regulatory Authority (FRA) has rejected the mandatory tender offer (MTO) from Adeptio to acquire the Egyptian International Tourism Projects Company (Americana), according to a disclosure to the bourse (pdf). The market regulator said that Adeptio’s offer price of EGP 3.9 per share was not in line with the financial evaluation, and cited Adeptio’s "lack of objectivity and reasonableness of assumptions."

FRA obliged Adeptio to hire a new independent financial consultant and present a fresh fair value offer within one month. Fincorp Investment Holding, which prepared the first fair value study, denied the study was unfair, according to Youm7. Americana’s minority shareholders had previously signaled they would only be satisfied with an offer in the range of EGP 24 / share.

Background: Adeptio acquired 67% in Kuwait Food Company (Americana) in June 2016 following a two-year process, giving it indirect ownership of the majority of Americana Egypt. The FRA then ordered Adeptio to submit an MTO to buy the remaining shares in Americana Egypt earlier this year and cover the 9.563% of Americana that Adeptio didn’t already own, but Adeptio had argued that its indirect ownership in the company is less than 90% of its total capital and therefore does not require an MTO submission. Adeptio submitted an appeal against the order, which the FRA promptly rejected. The company then filed a suit with an economic court challenging the FRA’s rejection, but the court also dismissed the appeal.

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