Swedish electronics firm Electrolux has announced an agreement with Paradise Capital to buy its 52 per cent share in Egypt's Olympic Group (OG), part of a long-planned takeover bid for the appliance company.
The agreed price per share is LE40.60 plus 12.75 per cent of the current market price, 10.28 per cent less than the deal struck pre-revolution.
Electrolux will also launch a mandatory tender offer to purchase all OG shares outstanding, in line with the capital market’s regulations. It will also sell OG’s ownership in Namaa and B-Tech to Paradise Capital as part of the deal.
A note from investment bank Beltone Financial called the deal positive for OG, shareholders and the market in general.
"The deal price of LE40.60 per share is understandably below that of the pre-revolution deal price, pricing in the increased political risk currently embedded in the Egyptian market," said Beltone, but noted it was still 23 per cent higher than their own valuation.
"We believe [this] is a large mark-up, highlighting the attractiveness of the local market and its strong future prospects."
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