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Sunday, 20 February 2022

Is Goldman Sachs being tapped to advise EFG on FAB’s acquisition bid? Plus: Old Mutual has competition for Lekela stake.

EFG Hermes plans to pick Goldman Sachs to advise shareholders on First Abu Dhabi Bank’s (FAB) acquisition bid, Bloomberg reported over the weekend, quoting sources familiar with the matter. Goldman ranked first for transaction advisory services in the Middle East last year, according to Bloomberg data.

EFG Hermes said it was looking to appoint an international financial advisor last week, along with an Egyptian law firm, to advise on FAB’s acquisition offer. Meanwhile, FAB has tapped Rothschild & Co as its financial advisor, while Matouk Bassiouny & Hennawy are the lender’s domestic legal advisors.

Let’s recap on FAB’s offer: In what would be the country’s biggest acquisition in years, the Emirati lender announced earlier this month that it had made a non-binding offer to purchase at least 51% of EFG in a transaction that would value the firm at EGP 18.5 bn. The bank has offered to purchase the shares for EGP 19.00 apiece, a 21% premium on EFG’s closing share price the day before the announcement.

EFG’s shares have surged almost 15% since the offer was made, closing at EGP 18.10 on Thursday. FAB could raise its offer price due to “the prominence of EFG Hermes, its financial position, and its strategic role in the financial markets in Egypt and the region,” Al Shorouk reported last week, citing unnamed sources it claimed have knowledge of the matter.

EFG’s top shareholders include French bank Natixis (12.2%) and Emirati investment firm RA MENA Holdings (11.7%). The firm’s ESOP program holds a 5.2% stake. Almost 53% of the firm is in the hands of very diverse group of investors from major institutions to domestic retail investors, the majority of whom do not meet the 5% threshold for publicly declaring their ownership.

IN OTHER M&A NEWS-

Old Mutual unit has competition for controlling stake in Lekela Power: South African mining firm Exxaro and Chinese state fund CNIC are among the final bidders in the running for Actis’ 60%’ stake in Lekela Power, Reuters reports, citing sources it says are familiar with the matter. African Infrastructure Investment Managers — a unit of Pan-African financial services outfit Old Mutual that was last week reported to be vying for the stake —- has also advanced to the final round and is currently seen as the frontrunner, the sources told Reuters.

Could a 60% acquisition become a 100% acquisition? Lekela’s other investor, Mainstream Renewable Power, is also looking to exit, Reuters reports. It had previously been reported that Mainstream was interested in buying Actis out of the renewables firm, which the two firms founded in 2015.

Lekela has a presence in Egypt, Ghana, South Africa, and Senegal and has been valued at more than USD 2 bn. The renewables company inaugurated its USD 350 mn, 250 MW wind farm in West Bakr last November, and said in 2020 that it would funnel most of its investments to Egypt in “the coming period.”

ALSO- Pharma manufacturer Adwia is looking at an acquisition, company head Mohamed Khattab was quoted as saying by Al Borsa, without disclosing the identity of the company. Negotiations should be finalized in March, he said.

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