EFG-Hermes Received Offer to Buy Shares from Planet IB

Planet Investment Banking said it raised $650 million in debt and a “lower amount” in equity for a possible bid to take over Egyptian investment bank EFG-Hermes Holding SAE.

“The only thing between us and a public tender offer is due diligence,” Chief Executive Officer Ahmed El Houssieny said. “Right now we’re actually oversubscribed in our investment fund. Our debt is fully arranged. We’re ready to tango.”

Cairo-based EFG-Hermes Holding SAE, whose co-chief executive officers were referred to trial yesterday, said it received an offer last night from Planet to buy all of the company’s shares. The interest comes before shareholders of EFG-Hermes, which has a market value of $869 million, vote on June 2 on an agreement to create an investment bank with Qatar’s QInvest LLC. The shares of EFG-Hermes, the biggest publicly traded Arab investment bank, rose the most in almost four weeks.

The timing of the offer “had to be adjacent to the” shareholders meeting, said El Houssieny, a former managing partner at Cairo-based private equity firm Citadel Capital SAE. Planet is backed by domestic, international and regional investors, including Sheikh Tariq Bin Faisal Al Qassimi, a member of the ruling family of Sharjah in the United Arab Emirates, as well as a “huge institutional investor out of Bahrain,” he said.

‘Right Mind’

The shares advanced 3.5 percent, the most since May 7, to 10.97 Egyptian pounds at the close in Cairo. They were suspended for three of the four trading hours on the Egyptian Exchange pending the release of more information about Planet’s offer.

EFG-Hermes said Planet didn’t disclose the price in yesterday’s letter. The Egyptian Financial Supervisory Authority hasn’t received an offer from Planet, Chairman Ashraf El Sharkawy said today.

“The seriousness of the offer is going to depend on the management allowing us to conduct due diligence, because any proper investor in their right mind isn’t going to bid for a company without conducting due diligence,” El Houssieny said.

EFG-Hermes said May 4 it agreed to start an investment bank that will be 60 percent owned by Doha-based QInvest, a unit of Qatar Islamic Bank, which will invest $250 million in the venture. The deal is yet to receive regulatory approval.

Mubarak Sons

Planet’s offer comes after the public prosecutor’s office said yesterday that EFG-Hermes’ Hassan Heikal and Yasser Al Mallawany were charged with illicit gains related to the 2007 sale of El Watany Bank of Egypt. EFG-Hermes has denied the charges, which centered around the lack of disclosure of trading activities and involved seven others including Alaa and Gamal Mubarak, the sons of former president Hosni Mubarak. Mallawany and Heikal didn’t respond to calls and text messages seeking comment.

Sheikh Al Qassimi is chairman of Emirates Investments Group LLC, according to the company’s website. A call placed after business hours in the U.A.E. to the headquarters of the group wasn’t answered.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE