Aug. 31 (Bloomberg) -- Kellogg Co., the maker of breakfast cereals, Pop Tarts and other packaged food, is seeking to buy a majority stake in Egypt’s Bisco Misr, a confectionery-maker in the most populous Arab country.
Bisco Misr said in a statement it agreed to a due diligence by Michigan-based Kellogg before a possible acquisition of at least 51 percent. That’s the third due diligence request Bisco Misr received this year after private equity firm Abraaj Group and Saudi Arabia’s Savola Group made similar moves.
“Whoever wants to get exposure into this market, it would like to look at someone like Bisco Misr,” Allen Sandeep, Cairo-based director of research at Naeem Brokerage, said. “With a market that has a population of 90 million, you look at any sub-segments within the consumer and food sectors and and there is massive potential.”
Bisco Misr, founded in 1957, reported a profit of 5.5 million Egyptian pounds ($769,000) in the second quarter compared with 13.4 million pounds a year earlier. It previously refused takeover bids from Juhayna Foods and Halwani Bros.
Bisco Misr owns three main facilities, one in Cairo and two in Alexandria, where it produces biscuit Luxe alongside a range of cakes and wafers, according to the company’s website. The shares rose 5.6 percent to 73.65 pounds today, the highest level on record, data compiled by Bloomberg show. Only 163 shares were traded, or 12.1 percent of the three-month daily average.
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