EFG-Hermes eyes majority stake in Pakistani brokerage house

Egypt’s EFG-Hermes, one of the largest investment banks in the Middle East, is planning to acquire a majority stake up to 51 percent in Karachi-based brokerage house Invest and Finance Securities (IFS).

The deal is pending the approval of the board, auditing, due-diligence review, and the fulfillment of some supervisory procedures, the Egyptian investment bank said in a statement Sunday.

Invest and Finance Securities Limited (IFS) is a listed company on the Karachi Stock Exchange since 20 March 2008. The Company, that has branches at Karachi and Lahore, is engaged in financial brokerage, corporate finance and financial research, according to the company’s official website.

Speaking to Pakistani The Express Tribune, IFS Chairman and CEO Muzammil Aslam said on Friday the Cairo-based EFG-Hermes would be the first multinational company to invest in Pakistan’s brokerage industry.

“Global investment banks have done business in Pakistan’s equity market, but EFG will be the first one to actually have its own skin in the game as a majority shareholder of a local brokerage house,” he said.

Further, EFG will conduct due diligence to acquire up to 10.2 million shares, or 51% of issued capital, of IFS. In case of a favourable outcome of the due diligence exercise, EFG will sign a share purchase agreement with the majority shareholders of IFS besides extending a tender offer to buy shares from its minority shareholders.