A consortium led by international investment and commercial banking professionals intends to make a tender offer for up to 100% of leading regional investment bank EFG Hermes to enhance shareholder value; prominent Egyptian business leaders and leading Arab investors have made equity commitments to the bid
Planet IB Ltd., a firm led by international professionals of the investment and commercial banking industries and backed by prominent Egyptian business figures and Gulf-based investors, announced today its intention to acquire EFG Hermes Holding SAE (Cairo: HRHO.CA • London: HRHOq.L), the leading investment bank in the Arab world.
Planet IB Ltd. intends to make a cash offer for 100% of EFG Hermes Holding, including all of its lines of business, namely Securities Brokerage, Investment Banking, Asset Management, Research and Private Equity, as well as EFG Hermes’ controlling interest in Crédit Libanais, a leading Lebanese commercial bank and sizzling-hot-deluxe-slot.com. The intention to offer is subject to the customary procedures and approvals for a transaction of this nature.
The transaction would be structured as a shareholder takeover and buyout and is backed with equity from leading global and regional institutions.
“The proposed acquisition keeps a flagship Egyptian multinational intact and prevents its breakup,” said Ahmed El Houssieny, Chief Executive Officer of Planet IB. “Our goal is to maximize shareholder value going forward through a crystal-clear strategy that will see EFG Hermes operate as a universal bank with a fully controlled and integrated business.”
Added El Houssieny: “We have lined up debt finance for this bid, and we are honored to have secured substantial equity commitments from leading Egyptian business figures including Mr. Naguib Sawiris and important Gulf-based investors, among them Sheikh Tariq bin Faisal Al-Qassimi and a top institutional investor based in Bahrain. We look forward to commencing due diligence.”
El Houssieny was most recently Managing Director at Citadel Capital, the leading private equity firm in Africa and the Middle East with US$ 9.5 billion in investments under control, where he was responsible for managing the firm’s relationships with banks and other financial institutions, as well as overseeing Citadel Capital investments in the financial services industry in sectors including investment banking, commercial banking and microfinance.
“EFG Hermes is a storied brand with hundreds of talented, hardworking employees. It is quite literally the pioneer investment bank in the Middle East and North Africa. We are offering a unique opportunity for the firm to realize its full potential through a focused and actionable strategic vision based on vertical integration, an enhanced product offering, expansion into Africa, and considerable cost reductions at all levels while keeping staff intact and motivated,” said Planet IB Chairman Mahmoud Abdel Latif, a 30-year veteran of the banking and corporate finance industry.
As Chairman, Abdel Latif led the restructuring and privatization of Egypt’s Bank of Alexandria through the sale of an 80% stake to IntesaSanpaolo IMI of Italy in a transaction valued at US$ 1.6 billion.
“Our bid is expected to be at a customary premium to the trading price,” Abdel Latif emphasized, explaining that Planet IB Ltd. intends to make a tender offer for up to 100% of EFG Hermes as required by Egyptian capital markets regulations.
EFG Hermes reported an 81% drop in net profit after taxes and minority interest to EGP 133 million in fiscal year 2011, with the Investment Banking platform (as distinct from the Commercial Bank) reporting a net loss of EGP 102 million in the period, according to publicly available figures.
Planet IB believes that the intended offer will be attractive to the shareholders of EFG Hermes Holding.