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Monday, 27 April 2020

FRA gives Cairo 3A the greenlight to acquire Egyptian Starch & Glucose

M&A WATCH- Market regulator approves Egyptian Starch & Glucose MTO: The Financial Regulatory Authority (FRA) has approved Cairo 3A’s mandatory tender offer (MTO) for 100% of Egyptian Starch & Glucose Company’s (ESGC) 50.08 mn shares at a price of EGP 8.61 per share, according to a disclosure (pdf). The MTO, which set a higher per-share price based on FRA demands, values the transaction at around EGP 431 mn. The offer remains valid through 7 May and will conclude Cairo 3A’s acquisition of ESGC from its three main shareholders, the Egyptian International Tourism Projects Company (Americana Egypt), Americana Egypt’s parent company Americana Group, and Cairo Poultry.

That is, unless the ECA has anything to say about it: Cairo 3A has telegraphed that it will wait for the Egyptian Competition Authority to give its approval before pushing ahead with the transaction. It is not necessary for companies to get approval from the competition watchdog for mergers and acquisitions, but the authority has long sought signoff on M&A.

Background: Cairo 3A earlier this year began its bid to purchase shares in Egypt Starch & Glucose held by three major shareholders: a 23.2% stake held by Egyptian International Tourism Projects Company (Americana Egypt), Americana Egypt’s parent company Americana Group’s 41% stake, and Cairo Poultry’s 27.3% stake.

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