EFSA Did Not Reject Hermes-QInvest Deal, But Needs Further Clarification: Experts
The Egyptian Financial Supervisory Authority (EFSA)’s announcement regarding halting the joint venture deal between EFG-Hermes (HRHO.CA) and Qatar’s QInvest has sparked off conflicting views among capital market experts.
Dr. Ashraf Al-Sharkawy, the Chairman of the Egyptian Financial Supervisory Authority (EFSA), said the authority approved the assembly in form but refused it in terms of content, procedures and decisions.
A number of capital market experts has asserted that EFSA’s announcement does not mean that the Hermes-QInvest deal was rejected but EFSA needs more clarification about various points regarding the deal including the minority rights after it is completed.
Accordingly, experts noted that once EFG-Hermes provides EFSA with further clarification on its deal with QInvest including the minority rights, the procedures for the deal will be completed.
“EFSA’s request for reconvening Hermes Shareholders’ meeting does not mean that the deal is being rejected as EFSA seeks further clarification on the minority’s rights in case of sealing this deal.” Wael El Nahas, a financial analyst with HA Securities told Amwal Al Ghad
Worth mentioning, EFSA chairman has noted that EFG-Hermes must provide the required information and re-convene the shareholders meeting so that procedures for the deal can be completed.
EFG-Hermes’ extraordinary shareholder meeting (ESM), held on June 2nd, ratified QInvest acquisition deal.
As pursuant to the agreement, QInvest shall seize 60% of EFG-Hermes Qatar’s capital and 40% of EFG-Hermes Holding.
The ESM also approved of EFG-Hermes’ strategic partnership with Qatar’s QInvest by the forms of transferring Hermes’ stakes in sectors of brokerage, research, asset management, investment bank services and infrastructure investment to EFG-Hermes Qatar for $250 million pursuant to the agreement – Item (1).
The ESM has also approved transferring 60% of EFG-Hermes’ stakes in Seed Capital of the asset management business at market value to EFG-Hermes Qatar, pursuant to the agreement – Item (2).
