The board of state-owned, EGX-listed paint maker Paint and Chemicals Industries (Pachin) has rejected Saybad Industrial Investment’s acquisition bid, saying in a filing to the bourse (pdf) on Thursday that it undervalues the company. Saybad earlier this month offered to pay EGP 16.00-16.50 per share to acquire up to 90% of the company, valuing it at EGP 384-396 mn, a price tag that Pachin said “does not reflect the true value of the company and its assets.”

It’s still a premium: Shares in Pachin were up nearly 2% to EGP 15.92 at the close of trading on Thursday.

It’s not over, folks: The company plans to hold talks with the Saybad to negotiate a price that’s more amenable, the statement reads. Pachin will decide on whether to proceed with due diligence on the transaction at the next general assembly meeting.

Refresher: Saybad Industrial Investment is an Egyptian outfit consisting of a group of local investors who are active in the paint industry here and across Asia, according to the EGX disclosure. Around 54% of Pachin is currently owned by state-owned companies and banks, making the sale a part of the state’s privatization plans, a source with first-hand knowledge of the transaction told Enterprise last week.

Even with the current climate, acquisition targets are feeling lowballed: This is the second rejection by a major listed M&A target in as many days, after Madinet Nasr Housing and Development’s (MNHD) board last week said SODIC’s bid was too low, and asked the company to substantially raise its offer.

Advisors: Catalyst Partners is acting as Pachin's financial advisor. Adsero–Raji Soliman & Associates is the firm’s legal advisor.