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B Investments eyes a majority stake in Orascom Financial Holding: EGX-listed private equity firm B Investments submitted an offer to acquire 51-90% of EGX-listed Orascom Financial Holding (OFH), the companies said in disclosures to the EGX (here, pdf and here, pdf) yesterday.
OFH majority shareholder wants to sell: OFH’s majority shareholder OTMT Acquisition and minority shareholder Orascom TMT Investments have agreed to sell their combined 51.72% stake in the company, OFH said. “The goal is to become part of a bigger entity with a strong track record in the market,” Orascom Financial Holding CEO Nils Bachtler told Enterprise yesterday.
A share swap transaction: The potential transaction is set to take place through a share swap agreement at a preliminary ratio of 1 share of B Investments total share capital (160 mn shares) for 56.76 shares of OFH share capital (4.7 bn after excluding treasury shares), according to the statements.
Expect the transaction to wrap up in 3Q, B Investments’ IR head Omar El Labban told Enterprise yesterday. Information about the due diligence processes and the fair value study of the potential transaction wasn’t made public.
OFH fits within B Investments’ strategy: “We target investments that cater to the wider demographics of Egypt in consumer-driven sectors and in seasoned management teams operating in growing companies such as Contact Financial Holding — of which OFH owns a 30% stake,” El Labban told us. “After our two successful exits of Giza Systems and TotalEnergies Egypt, we are very keen on growing our investment portfolio and driving further growth to our shareholders. Our partnership with OFH is an integral part of our long-term investment strategy,” El Labban added.
The valuation could change: B Investments will appoint an independent financial advisor to determine the fair value of both companies to the potential transaction, which could result in a change to the initial share swap ratio, the statements read.
What’s next? B Investments shareholders will vote at an extraordinary general assembly meeting on a capital increase to issue new shares for the purpose of the potential transaction.
The company will then have to submit all necessary documents to the relevant regulatory bodies including the Financial Regulatory Authority. Once approved, the regulator will give OFH shareholders a deadline in which to respond to the offer.
OFH by the numbers: The company’s net income declined 28% y-o-y to EGP 19.8 mn in 1Q 2023, down from EGP 27.4 mn, according to a disclosure to the EGX.
Market reax:OFH’s share price closed 19.8% up at EGP 0.29 yesterday, and B Investments closed 6.7% up at EGP 21.77.
Advisors: Zaki Hashem & Partners was appointed legal advisor of B Investments, while OFH appointed White & Case as its legal advisor, according to El Labban.
