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Sunday, 12 July 2020

Americana Egypt shareholders approve Adeptio offer price

M&A WATCH- Americana Egypt shareholders approve Adeptio offer price as market regulator approves share value methodology: Minority shareholders in Americana Egypt have approved Adeptio’s offer price of EGP 6.32 per share under a proposed mandatory tender offer (MTO), the local press reports, citing informed sources. This came after the Financial Regulatory Authority (FRA) approved the valuation methodology used by Adeptio’s financial advisor Ernst & Young but forced the Emirati outfit to up its offer price to account for the full value of the company.

What happened? The market regulator said in a statement (pdf) the offer price must account for the value of the company as a whole, rather than the minority shares targeted in the MTO. Adeptio is now required to remove or tone-down a figure used in the fair value study known as the discount for lack of control (DLOC). The change in the DLOC, which Adeptio has already agreed to, required the company to pay an average price of EGP 5.92 per share, or maximum price of EGP 6.32, up from the previous EGP 5.00 estimated by Ernst & Young using a DLOC.

Background: Ernst & Young was selected for the job last April after Fincorp, which was hired to determine a value for the MTO, was suspended by the FRA for understating the share price at EGP 3.90 apiece. Americana’s minority shareholders rejected the price, claiming that the value is somewhere in the region of EGP 24 per share. The story goes all the way back to when the FRA ordered the UAE’s Adeptio AD Investments to buy out minority shareholders in Americana Egypt after the former acquired the latter’s parent company Americana and gained indirect ownership of more than 90%.

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