Citadel Capital SAE, an Egyptian private equity firm with $4 billion in assets under management, rose to the highest in almost three months on speculation it is closer to selling a stake to Dubai-based Abraaj Capital Ltd.
The shares rose 4 percent to 6.32 Egyptian pounds at the 2:30 p.m. close in Cairo, the highest level since March 23. That gave the company a market value of 4.18 billion pounds ($703 million). The benchmark EGX 30 Index gained 1.6 percent.
Private-equity firm Abraaj may hire Morgan Stanley as an adviser on the planned acquisition, two people familiar with the situation said June 16. Citadel Capital Partners, the main shareholder in Citadel Capital, may hire Citigroup Inc. to advise on the possible sale, the people said, speaking on condition of anonymity because the talks are private. One person said Abraaj is seeking a controlling stake in Citadel.
“Investors expect Abraaj to pay a higher price for Citadel shares than they are currently trading at,” said Ramy El Agamy, manager of institutional sales at NBK Capital Securities Egypt in Cairo. “Citadel would benefit because Abraaj will provide liquidity to enable it to continue its expansion in the region after Egypt’s regulator refused its capital increase.”
Egypt’s markets regulator last month rejected Citadel’s application for a capital increase because the company didn’t provide enough detail on how it will use the funds. Citadel said it would appeal the decision.
Morgan Stanley officials weren’t immediately available to comment. Officials from Citigroup and Citadel Capital declined to comment. None of the officials would be identified, citing internal policy.