Monday, 31 May 2021

FRA pulls the brakes on Egytrans, Paradigm Logistics partnership

EgyTrans is once again happy with an acquisition offer from HA Utilities BV, after a separate, higher bid that had prompted it to rethink the sale was challenged by the Financial Regulatory Authority. The authority slammed the offer by Paradigm Logistics in a regulatory filing (pdf) today, saying the company has no grounds to propose to swap its 72% stake in shipping company Ostool, in exchange for new shares in EgyTrans. Paradigm apparently never completed its purchase of 72% stake, as it has yet to buy the 62.3% of Ostoul from Raya Holding. Paradigm and Raya still need to meet conditions outlined in a sale contract by no later than 31 March 2022.

Following the FRA’s statement, EgyTrans said it’s no longer considering Paradigm’s offer, and will instead turn to ongoing talks with HA Utilities BV, a Netherlands-based subsidiary of HA Utilities, to acquire a 65% stake in EgyTrans via a reverse merger, according to a separate filing (pdf).

Why did Paradigm’s offer prompt EgyTrans to pay less attention to HA Utilities anyway? Paradigm valued EgyTrans’ shares at EGP 460 mn, which was higher than the EGP 414 mn proposed in a fair value report attached to HA Utilities’ bid.

Background: Egytrans had accepted in March an offer from HAUH to acquire a controlling stake in the company. The transaction took a step closer this week, when the final fair value reports for both companies were finalized by Grant Thornton.

CORRECTION: This story was amended on Tuesday, 1 June 2021 to reflect that Ostool is a shipping company, not a shopping company. Autocorrect is never there for you when you most ducking need it.

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