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Monday, 5 April 2021

FRA and SPMD reject fair value reports ahead of Prime Speed takeover

FRA orders do-overs on SPMD, Prime Speed valuations ahead of takeover: The Financial Regulatory Authority (FRA) has ordered the reassessment of the fair value report on diagnostics and healthcare firm Speed Medical (SPMD) ahead of its acquisition of sister company Prime Speed Healthcare, the market regulator said in a statement (pdf). The FRA also ordered a re-evaluation of Prime Speed Healthcare to ensure both companies’ fair value reports are “compatible with Egyptian financial valuation standards,” the statement said. Speed Medical’s board of directors also rejected the valuation, according to a separate statement (pdf) yesterday, with Chairman Mahmoud Lasheen telling CNBC Arabia that the board does not believe the valuation reflects the company’s true value (watch, runtime: 6:53).

What the auditors think SPMD and Prime Speed are worth: Eagle Capital — which prepared the report on behalf of Economic Group Financial Consulting Company — had valued Speed Medical at EGP 2.4 bn and Prime Speed at EGP 1.8 bn. SPMD will not be hiring a new auditor to prepare the revised fair value reports, the company said in a separate statement (pdf) Monday. The company will ask the independent auditor to wait until 1Q2021 results are issued before reassessing, it said in the statement.

The rejection follows the SPMD board's signoff earlier this week on the takeover of Prime Speed in a transaction that would give Speed Medical 100% ownership of Prime Speed for Medical Services, in which it currently holds a 30% stake. Speed Medical will proceed with the acquisition once it obtains 75% General Assembly approval, it said in the disclosure Sunday.

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