EFG-Hermes: QInvest Takeover Put Off On Govt Approvals Delay
EFG-Hermes Holding SAE (HRHO.CA), Egypt’s biggest investment bank, said its takeover deal with Qatar’s QInvest LLC, which was expected to be finalized before the end of last year, has been postponed due to a delay in obtaining governmental approvals on some Arab countries.
In a release sent to the Egyptian Exchange on Sunday, EFG-Hermes further noted that it is currently completing the procedures necessary to finalize the deal as soon as possible.
It is worth noting that the invest bank’s extraordinary general assembly had approved EFG-Hermes’ strategic alliance with QInvest which includes the asset management, brokerage, researches and bank investment services.
As pursuant to the agreement, EFG Hermes and QInvest will enter into an alliance where 60% will be owned by QInvest and 40% owned by EFG-Hermes holding. The JV Company shall be the entity holding the Business post-closing.
As a result of the transaction, QInvest will inject US$250 million in the form of a capital increase at the level of EFG Hermes Qatar that will be used in consideration for transferring the Business to the JV Company.
EFG Hermes will have the right to sell its entire 40% shareholding in the JV Company to QInvest at any time during the period between 12 to 36 months from signing of the transaction at a price of EGP 1,000m (c.US$165m). QInvest will have the right to acquire from EFG Hermes its entire 40% shareholding at any time during the period between 12 to 36 months from signing of the transaction at the higher of US$165m or fair market value at the time of the exercise subject to a cap.
At closing QInvest will also acquire from EFG Hermes 60% of the seed capital of the asset management business at market value.
Closing is conditional on shareholder approval at the general assembly of EFG Hermes and the receipt of relevant regulatory approvals. The transaction is expected to be finalized by 2012 Q3.
The deal means QInvest will control 60 per cent of the new bank, which will be called EFG-Hermes Qatar, and will pour in $250 million to increase its capital.
