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Tuesday, 15 September 2020

Nile Cotton Ginning board thinks IMEX offer price is low

M&A WATCH- Nile Cotton Ginning board thinks IMEX offer price is low: Nile Cotton Ginning’s board of directors believe that IMEX International’s mandatory tender offer to purhcase at least 51% of the company’s shares at EGP 50 apiece is an undervaluation and needs an upward revision, according to an EGX filing (pdf). Shareholders balked at the valuation late last month, with top shareholder Samir Afifiy reportedly refusing to accept a price below EGP 70. The company’s worker’s union, which holds 7.06%, was amenable to IMEX’s price, since it exceeded the EGP 49 / share figure that was last offered by a group of unnamed investors looking to purchase the union’s stake.

Background: The company is at the center of a longstanding dispute after a 2011 court ruling sought to reverse the company’s Mubarak-era privatization, claiming the company had been undervalued. The investment dispute resolution committee reached a settlement last June that required Nile Cotton pay EGP 231.1 mn to the Holding Company for Construction and Development, allowing Nile Cotton’s shareholders to resume trading the company’s shares on the EGX after an eight-year hiatus.

CLARIFICATION – 16 September 2020

A previous version of this story said that the board had unanimously rejected the price offered by IMEX, and implied that the MTO could hit a stumbling block. Shareholders speaking to Enterprise and the local press this week said that they have subscribed to the ongoing MTO, and expect the offer to be successful and reach the minimum 50% required for execution.

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