Back to the complete issue
Monday, 22 August 2022

As a bidding war heats up, Pachin’s biggest shareholder is doing its own FV and seeking investment bankers

Pachin’s biggest shareholder to hire advisors for fair value study: Chemical Industries Holding Company (CIHC) will appoint an independent financial advisor to value Paint and Chemical Industries’ (Pachin) amid a bidding war for the EGX-listed paint company, CIHC Chairman Emad El Din Mostafa told Enterprise. CIHC — Pachin’s largest shareholder — has chosen to do its own fair value study because the offers received by Saybad Industrial Investment and Universal Building Materials and Chemicals (Sipes) have not been acceptable and “do not reflect the fair value” of Pachin, Mostafa said.

Who’s offering what: Saybad’s latest bid offered to pay EGP 16.50-18.75 per share for 100% of the company, valuing it as much as EGP 450 mn. This was a revised offer in response to a rival bid from Sipes which said it would purchase all of the company’s shares at EGP 17.50-18.50.

Expect advisors to be named by week’s end: CIHC has received offers from potential advisors and expects to make a choice by the end of the week, Mostafa told us. The company is also looking to bring on board investment bankers to advise it, though Mostafa did not specify a deadline for their appointment.

CIHC could offload its entire stake — for the right price: CIHC currently holds 44.6% of Pachin, while Banque Misr holds another c.11% of the company. Together, these two shareholders can offload their positions and give the acquiring company a majority position in Pachin, Mostafa said. “The bidders are looking to get a controlling stake. We [CIHC and Banque Misr] are willing to give that controlling stake if we get an offer that matches the company’s fair value,” he said.

Market reaction was muted: Pachin’s shares inched up 0.1% in trading yesterday to close at EGP 18.00 per share, after hitting an intraday high of EGP 18.17.

REMEMBER- The play on Pachin comes amid the government’s privatization push, which should see it reduce its involvement in or exit certain industries to make way for the private sector. Pachin is currently approximately 54% owned by state-owned companies and banks.

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

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.