Pachin bidding war intensifies: Dubai-based National Paints Holding’s (NPH) has upped its offer for EGX-listed Paint and Chemical Industries (Pachin) in response to Eagle Chemicals’ new bid last week, the Financial Regulatory Authority (FRA) said in an EGX disclosure (pdf) on Thursday. The Emirati firm is now offering to purchase 75-100% of the state-owned company for EGP 36.00 per share, EGP 1.00 higher than Eagle Chemicals’ EGP 35.00 bid submitted last Tuesday. NPH’s new offer values the company at EGP 864 mn, according to our calculations.

Tick tock: NPH’s new offer has extended the 10-day mandatory tender offer (MTO) by an additional day, giving Pachin’s shareholders until Tuesday, 4 April to respond.

Market reacts: Pachin’s shares rose 4.8% to EGP 36.6 during Thursday’s trading.

NPH has big plans for Pachin,including developing Pachin factories, adding new products, and increasing export revenues, Pachin said in an EGX disclosure (pdf).

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 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. Al Ahly Pharos is advising Pachin, and Shalakany Law Office is legal counsel.

SIDPEC FINISHES DUE DILIGENCE ON ETHYDCO-

Sidpec-Ethydco merger is nearing the endgame: EGX-listed Sidi Kerir Petrochemicals (Sidpec) has completed due diligence on Egyptian Ethylene and Derivatives Company (Ethydco) ahead of a potential all-share merger, Al Mal reports, citing sources familiar with the matter. The financial advisor working on the transaction, Baker Tilly, has issued the swap ratio and is working on the final legal and financial reports, which will be put to the companies’ boards for approval, the sources said.

Transaction could close within three months: Al Mal’s sources say that the acquisition could be finalized before the end of 2Q 2023 in June.

REMEMBER- The merger has been in the works since last year, when Sidpec expressed interest in fully acquiring Ethydco through a share swap. Sidpec currently owns 20% of Ethydco, making it the company’s second-largest shareholder.

Investors are already lining up: Gulf investors have expressed interest in acquiring stakes in the planned merger, eyeing between 16-20% of the new company.

Ethydco is in the state’s privatization plans: The chemicals firm is among the 32 state-owned companies that the government is looking to part-privatize over the coming year. The government has not mentioned Sidpec as being in line for privatization though an unconfirmed press report claimed it could look to offer a secondary stake to investors.

Tags: