FRA approves National Paints Holding’s bid for Pachin
The clock is ticking for Pachin shareholders: Shareholders of state-owned, EGX-listed Paint and Chemical Industries (Pachin) will have 10 working days to respond to Dubai-based National Paints Holding’s (NPH) takeover bid after the Financial Regulatory Authority (FRA) yesterday approved the offer, the regulator said in a statement (pdf). The 10-day mandatory tender offer (MTO) starts Tuesday, giving shareholders until 3 April to decide whether to sell their shares.
REFRESHER- NPH has offered to purchase at least 75% of Pachin’s shares for EGP 34.00 a share, valuing it at some EGP 816 mn. The company upped its offer earlier this month from its initial EGP 29.00 bid in November in response to a number of competing bids. Shareholders owning at least 75% of the company’s shares will need to agree to sell for the acquisition to go through, the FRA said yesterday.
Shareholders: Pachin is majority-owned by state institutions, with Chemical Industries Holding owning 44.6% of and Banque Misr holding a 10.5% stake. Other major shareholders include AMN Industrial Investment with a 9.7% stake and El Sayed Saber with 5.5%. Some 28.7% of its shares are freefloat.
We’re yet to hear from Pachin’s other potential suitors: Compass Capital and Eagle Capital have also submitted bids for the company in recent months, with Compass offering to purchase 51-90% of its shares for EGP 30.00 apiece and Eagle mounting a takeover bid for EGP 29.00 per share.
What Pachin’s future would look like if NPH’s acquisition goes through: NPH is committing to maintaining Pachin’s existing workers for the first 12 months after the acquisition, according to the FRA statement. Pachin’s shares would undergo voluntary delisting from the EGX within six months of the acquisition closing.
What’s next: If the shareholders accept the offer, the transaction will be concluded on the EGX within the following five working days, according to the statement.
Market reax: Pachin’s shares closed up 5.0% to settle at EGP 32.50.
Advisors: Al Ahly Pharos is acting as broker on the transaction, Matouk Bassiouny & Hennawy are acting as NPH’s legal counsel, while the company doesn’t have a financial advisor, according to the statement. Al Ahly Pharos is advising Pachin, and Shalakany Law Office is legal counsel.