State pharma firms could offer minority stakes within six months
Two state-owned pharma firms to sell minority stakes within six months? The government wants to sell sizable minority stakes in two state-owned pharma companies earmarked for privatization in the coming six months, Al Mal reports, citing unnamed sources it says are familiar with the matter. Between 30-40% of Chemical Industries Development Company (CID) and Misr Pharma will be offered to investors, likely in an IPO on the EGX, according to the sources. Both companies are on the list of the 32 state-owned companies in which the government plans to sell stakes within the next year.
The government is in talks with several investment banks to lead the offerings and fair value studies are being conducted, according to Al Mal’s sources.
State to remain in control: Both companies are subsidiaries of the Holding Company for Pharma Industries (HoldiPharma), which plans to maintain its controlling interests.
No interest from strategics: No strategic investors have shown interest in acquiring the shares, according to the sources.
REMEMBER- Strategics tend to look to buy majority stakes. Most strategic investors have strong preferences for majority stakes (to ensure they can fully consolidate the results of their new investment) with clear management control (to make sure they can drive performance improvements.) This theme will run throughout the privatization program — doubly so when we’re talking about well-managed, well-governed companies that aren’t already listed on the EGX.