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Thursday, 5 January 2023

Another bidder joins the war for Pachin

Everyone wants a piece of Pachin: Compass Capital has submitted a non-binding offer to purchase between 51-90% of Paint and Chemical Industries (Pachin) for EGP 30 a share, according to a disclosure to the EGX (pdf) from the Financial Regulatory Authority yesterday. Compass’ offer values Pachin at EGP 720 mn.

The bids are hotting up: Compass’ offer is the highest of five that the regional paint distributor has received since last summer, outbidding Eagle Chemicals’ EGP 29.5 a share offer and UAE’s National Paints Holdings EGP 29 per share offer.

Two suitors have fallen by the wayside: Universal Building Materials and Chemicals (Sipes) and Saybad Industrial Investment withdrew their takeover bids after Pachin rejected them for undervaluing the firm.

What’s next? Compass will conduct due diligence on the company before determining a final price, while Eagle Chemicals is also working on its due diligence. We’re expecting to hear back from Pachin in response to NPH’s offer later this month, but seeing as the company has now received not one, but two offers that are more generous, it’s not looking too good for NPH.

REMEMBER- The play for 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: Al Ahly Pharos is advising Pachin while Shalakany Law Office is counsel.

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