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Monday, 4 July 2022

Expedition Investments submits bid for 34% stake in Domty

Expedition Investments has submitted an official bid to acquire a 34% stake in cheesemaker Domty, the Financial Regulatory Authority (FRA) said in a disclosure to the EGX (pdf) yesterday. The consortium has offered to purchase up to 96.2 mn shares for EGP 5 a piece in a mandatory tender offer, the regulator said, giving the transaction a potential value of around EGP 481 mn.

The acquisition would give the consortium ownership of 90% of Domty’s shares, the FRA said. Domty’s founders, the Damati family, already control 56% of the EGX-listed company, and also own minority stakes in Expedition.

Who else is involved? Expedition is an offshore special purpose vehicle controlled by unknown investors in Egypt and the Gulf. The company is domiciled in Mauritius and counts veteran investment banker Mohamed El Akhdar as a board member. It was established on 21 March, according to the Mauritius company register.

What’s next? Expedition has completed its due diligence process on Domty and is currently awaiting the FRA’s approval to go ahead with the acquisition, sources told Al Borsa. The acquisition is expected to go ahead by the end of August, they said.

The market reaction: Domty’s shares rose 3.2% during trading yesterday, closing at EGP 4.8.

Advisors: Matouk Bassiouny & Hennawy is advising Expedition on the transaction.

IN OTHER M&A NEWS-

MNHD’s acquisition of Minka appears to be back — at a reduced price: The board of Madinet Nasr Housing and Development (MNHD) has given preliminary approval to acquire real estate company Minka Development and related special purpose vehicle EgyCan for Real Estate Development for up to EGP 200 mn, the company said in an EGX filing (pdf) yesterday. This is below the EGP 232 mn valuation produced by Baker Tilly Wahid Abdel Ghaffar & Co last year. MNHD will now have the firm produce an updated fair value study on the two companies, according to the filing.

Background: MNHD CEO Abdallah Sallam is the former managing director at Minka, and moved into his new role at MNHD at the same time as it announced the acquisition in October. Minka is owned by the Sallam family, who are set to use the proceeds from the sale of their company — plus an additional EGP 50 mn — to purchase a minimum 5% stake in MNHD, we were told last year, making them the third largest minority shareholder in the company. The family has already invested more than EGP 50 mn ahead of the acquisition, the company said yesterday.

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