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Thursday, 12 March 2020

Market regulator mulls moving a lawsuit against Adeptio

DISPUTE WATCH- Market regulator mulls moving a lawsuit against Adeptio chairman: The Financial Regulatory Authority (FRA) is considering filing charges against Emaar chairman and Adeptio Investments head Mohamed Alabbar for failing to submit a mandatory tender offer (MTO) for the minority stake in the Egyptian International Tourism Projects Company (Americana), according to Youm7, which does not cite a source for the story. Last month, the FRA’s grievance committee rejected Adeptio’s appeal against the market regulator’s decision to reject the previous MTO it made in November arguing that the financial advisor that conducted the company’s fair value assessment had been in violation of fair evaluation practices. The committee also upheld a previous FRA decision requiring Adeptio to hire a new financial advisor to conduct a new valuation and make a new MTO, which Adeptio has since failed to do.

Background: Adeptio acquired a 67% stake in Americana Egypt’s parent company, Kuwait Food Company (Americana) in 2016, handing them indirect ownership of more than 90% of the subsidiary’s shares, which triggered an MTO clause for the remaining 9.563% shares. Adeptio had initially claimed it should not be required to submit an MTO, but after a few denied appeals, the company submitted an initial offer price of EGP 3.9 per share, based on Fincorp’s study. Americana’s minority shareholders were dissatisfied and asked for an offer worth EGP 24 per share. Fincorp was then suspended from carrying out valuation studies for a period of three months by the FRA.

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