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Pachin battle continues: The bidding war for EGX-listed Paint and Chemical Industries (Pachin) continued yesterday after Eagle Chemicals again increased its offer in response to the improved bid by National Paint Holding (NPH) lodged last week. The local chemicals company is now offering to purchase at least 75% of state-owned Pachin for EGP 39.00 per share, up c.5% from its previous EGP 37.00 per-share bid,according to an EGX bulletin. The new bid values the company at EGP 936 mn, according to our math.
How the offer compares: Eagle Chemical’s new bid is more than 3% above NPH’s offer. The Emirati company last week raised its offer to purchase at least 75% of the company to EGP 37.75 a share.
Pachin’s valuation has surged:The latest bid is more than 34% above NPH’s initial EGP 29 per-share offer.
Shareholders get a three-day extension to respond: The Financial Regulatory Authority (FRA) has extended the ongoing mandatory tender offer (MTO) by three working days, giving shareholders until 18 Aprilto decide whether to sell their shares to Eagle Chemicals or NPH, the bulletin reads.
Market reax: Pachin’s shares fell 0.4% to EGP 38.48 on Wednesday.
On the same day as the new bid: Pachin’s board published the findings of its evaluation of Eagle Chemicals’ older bid — EGP 37.00 per share — showing that it valued the company’s shares 26% higher than the three-month volume weighted average price (VWAP) and 48% above the six-month average, according to a disclosure to the EGX (pdf) out yesterday.
Pachin’s board also approved of the future plans Eagle Chemicals has for Pachin if the transaction goes through, saying they would have a positive effect on the company’s employees, according to the statement. Eagle has said it would maintain Pachin’s existing workforce for 12 months after the acquisition, as well as take the company private.
ADVISORS- Al Ahly Pharos is financial advisor to Pachin while Shalakany Law Office is counsel. Matouk Bassiouny & Hennawy are acting as NPH’s legal counsel, while Nour Law Office is counsel to Eagle Chemicals alongside Al Tamimi & Company. Marei, Fayez, Dardiry & Partners is legal advisor to Compass Capital. HC Brokerage is brokering the transaction.
