M&A WATCH- Adeptio says FRA’s rejection of MTO for Americana Egypt “unjustifiable,” could resort to legal action: The Financial Regulatory Authority’s (FRA) rejection of Gulf investment outfit Adeptio’s mandatory tender offer (MTO) to acquire the Egyptian International Tourism Projects Company (Americana) last week is “unjustifiable,” Adeptio said in a statement yesterday (pdf). The company says the MTO it presented, which was prepared by a financial consultant “endorsed by the FRA,” offered to buy Americana’s stakes at a fair value. Adeptio suggested in the statement that the FRA’s decision was influenced by “systematic and negative media campaigns launched against the company” and called on the market regulator to reassess its decision based on the provisions of Egyptian law.

Adeptio is now looking into taking legal action, saying it will “spare no effort to escalate the issue to the highest authorities” should a settlement agreement fail to materialize. The company maintains that it has cooperated with the FRA on its previous decisions on the matter, which Adeptio says is an indicator of its “confidence” and “commitment” to its investments in Egypt.

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 doesn’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. Adeptio then submitted an MTO for Americana, offering EGP 3.90 per share, which the FRA said was was too low an offer. Americana’s minority shareholders had previously signaled they would only be satisfied with an offer in the range of EGP 24 / share. The FRA obliged Adeptio to hire a new independent financial consultant and present a fresh fair value report within one month.