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Wednesday, 26 October 2022

SODIC offers to buy O West developer ORE for EGP 2.46 bn

SODIC is making a bid to acquire Orascom for Real Estate (ORE). The upmarket real estate developer has submitted a preliminary, non-binding offer to acquire 100% of the Orascom Development Egypt (ODE) subsidiary, the companies said in separate exchange filings (here, pdf | here, pdf) yesterday.

SODIC is feeling very acquisitive under new ownership: An Emirati consortium of real estate giant Aldar Properties and Abu Dhabi sovereign wealth fund ADQ acquired 85.5% of SODIC for EGP 6.1 bn last year — and it’s pushing for aggressive growth in a market it sees laden with potential. Aldar said last year after the SODIC acquisition that it was mulling several additional investments in the Egyptian real estate market. The company recently offered to acquire 100% of MNHD in a transaction valuing the company at some EGP 6.2 bn in July, a bid that MNHD shareholders said was too low. SODIC then dropped its bid for MNHD.

The valuation: SODIC’s offer values ORE ⁠— which owns the 4.2 mn sqm O West development ⁠— at almost EGP 2.5 bn (USD 124.9 mn). That’s equal to more than a third of ODE’s nearly EGP 6.4 bn market cap.

Due diligence is underway: ODE given SODIC the green light to do due diligence, it said, paving the way for talks on the transaction to begin. ODE is actively considering the offer, a source familiar with the transaction told Enterprise yesterday, declining to comment further.

Market reax: ODE shares gained 5.3% during trading yesterday to close at EGP 5.99.

O West is a serious money-maker for ODE: Revenues from the O West development in West Cairo accounted for a fifth of ODE’s top line in 2021. It was the second-most lucrative location after El Gouna, according to company figures (pdf).

Who owns what: ODE owns a 70% majority stake in ORE, while founder Samih Sawiris owns the balance, according to the company’s shareholder structure (pdf).

ADVISORS: CI Capital is sole financial advisor on the buy side and Zulficar & Partners are buy-side legal counsel. EFG Hermes have the mandate as sole sell-side financial advisor.

The story got attention internationally: Reuters.

EIPICO IS GETTING BORED WAITING FOR UP PHARMA-

The board of Egyptian International Pharma Industries Company (EIPICO) could abandon its bid to acquire Upper Egypt Pharma (UP Pharma) after months of waiting on the company to allow it to conduct due diligence, EIPICO said in an EGX disclosure (pdf) yesterday.

Refresher: EIPICO’s board had approved the start of procedures to potentially acquire 99.9% of UP Pharma in late May. Both firms are owned by the Arab Company for Drug Industries and Medical Appliances (ACDIMA). The transaction would see EIPICO snag ACDIMA’s stake in UP Pharma to bring its sibling firm under its umbrella.

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