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Thursday, 3 June 2021

ADQ could be eyeing up Juhayna

ADQ Holding looking at a stake in Juhayna? Abu Dhabi’s sovereign wealth fund ADQ Holding is mulling the acquisition of an undisclosed stake in Egyptian dairy giant Juhayna, Bloomberg reports, citing unnamed sources with direct knowledge of the matter. The discussions are still at a preliminary stage and there’s no certainity the fund will go ahead with the transaction, sources said.

ADQ would pick up Juhayna at a sharp discount to where it was trading just five months ago: The company’s share price has plunged more than 40% since mid January, handing it a market cap of less than EGP 4 bn compared to EGP 6.7 bn earlier this year. Shares in the company suffered a huge 17% intraday plunge in February after CEO Seif Thabet was detained in an investigation into alleged financing of terror groups (unrelated to his role at the company), just a few months after his father was detained amid similar allegations. Juhayna’s shares have been under pressure for the past two years, and are now worth less than a third of their peak in 2019.

Juhayna is also facing issues with the EGX after failing to report its 2020 financials. The bourse has moved the company to its “D-list” until it receives its annual accounts, meaning investors cannot buy its stock on margin and it won’t be on the list of stocks in which same-day trading is permitted. The company says it hopes to submit its financials by mid-June.

ADQ has been on an acquisition spree as of late, acquiring 100% of Amoun Pharma in April in a USD 740 mn transaction, and investing USD 1 bn last year in retailer LuLu’s Egypt expansion. It’s also looking at investments in Egyptian meat and poultry business Atyab and gas stations operator Wataniya. Still, having amassed an estimated USD 110 bn in assets since its founding in 2018, the fund wants to make significant new investments over the next five years, CEO Mohamed Hassan Alsuwaidi told Bloomberg last month.

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