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Wednesday, 8 March 2023

National Paints Holding just raised its bid for Pachin

National Paints Holding ups Pachin bid: Dubai-based National Paints Holding (NPH) has raised its offer for Paint and Chemical Industries (Pachin) by 17% in a mandatory tender offer (MTO) submitted yesterday, according to a Financial Regulatory Authority (FRA) statement (pdf). The company has offered to purchase at least 75% of the company for EGP 34.00 a share, up from its initial EGP 29.00 bid in November. The offer values the company at some EGP 816 mn by our math.

The new offer makes NPH the highest bidder so far for Pachin: Pachin has fielded at least five takeover offers in recent months. Last we heard, two other suitors were still in the running and conducting due diligence on the firm: Compass was leading the pack with a EGP 30.00 per-share bid while Eagle Chemicals offered EGP 29.50.

The updated bid offer is the first following PM Madbouly’s decision to include Pachin in the gov’t privatization program. The three bidders were reportedly rethinking their options for EGX-listed Pachin following its inclusion in the state privatization program in early February. Pachin’s inclusion on the list had raised the possibility that the government could look to dilute its position by calling for a capital increase via the EGX or decide not to bring in strategics. Pachin is currently approximately 54% owned by state companies and banks.

What’s next? Pachin’s shareholders will take a month or more to evaluate NPH’s offer, a source with knowledge of the matter told Enterprise yesterday. The company hasn’t yet received new or renewed offers from any other bidders, but isn’t ruling it out, he added.

Advisors: Al Ahly Pharos is advising Pachin, while Shalakany Law Office is counsel. The advisors on the buy side were not disclosed.

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