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Monday, 15 March 2021

Egytrans conditionally approves Hassan Allam Utilities purchase offer

Transport player Egytrans has conditionally accepted an offer submitted by HA Utilities Holding (HAUH) last week to acquire a controlling stake in the company via a reverse merger, the listed company said in a regulatory filing (pdf). The company’s board “carefully reviewed the proposal and unanimously concluded that the proposal merits further review,” Egytrans chairperson and managing director Abir Leheta said in a statement (pdf).

How Egytrans sees the partnership: “This potential partnership aligns with Egytrans’ ambitious strategy of expansion” into Africa, Leheta said. The company will open talks with HAUH to get a clearer idea of the latter’s vision and value contribution to the proposed partnership while also mapping out potential operational synergies.

The story so far: HAUH last week submitted a non-binding offer to acquire a 65% stake in Egytrans via a share swap. The transaction would see Egytrans acquire 100% of one of the company’s subsidiaries and HAUH take a stake in Egytrans. HAUH estimates Egytrans to be worth EGP 375-405 mn based on a EGP 12-13 share price, and said its subsidiary could be valued at EGP 680-800 mn.

What’s next? The approval paves the way for Egytrans to conduct due diligence and a fair value assessment on HAUH. Egytrans has not decided when it will start due diligence on HAU, Leheta told us. Hassan Allam will kick-off its due diligence when Egytrans decides on a date, a company representative told us.

Advisors: Egytrans has appointed Grant Thorton and an unnamed investment bank as its financial advisors, while Matouk Bassiouny & Hennawy will serve as counsel. White & Case will provide counsel to Hassan Allam, but the company declined to disclose who they have tapped as financial advisors.

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