Egypt’s Bisco Misr accepts Kellogg Offer

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Shareholders in the Egyptian cake and biscuit maker, Bisco Misr, have agreed to sell a controlling stake to Kellogg.

The world’s largest maker of breakfast cereals won a US$87 million takeover battle for the company, after outbidding Dubai-based private equity firm Abraaj.

It said last week it would withdraw from a bidding war with Kellogg that had driven up the offer price by more than 20 per cent.

Shareholders controlling 59.91 per cent of the company’s shares agreed to sell at 89.86 Egyptian pounds per share, Bisco Misr said yesterday.

The tussle over Bisco Misr is part of a flurry of mergers and rights issues boosting activity on the Cairo bourse, which has struggled to revive investor confidence in the turmoil that has followed the 2011 Arab Spring upheavals.

Bisco Misr shares closed at 88 pounds in Cairo yesterday.

There has also been a takeover battle for Arab Dairy between Europe’s biggest dairy group, Lactalis, Saudi Arabia’s Arrow Food Distribution and the financial firm Pioneers Holdings, and Egypt’s El Nour Dairy Products.

The regulator has extended the bid deadline to January 15 to allow participants to present counter offers for Arab Dairy.

Kellogg had indicated it was not willing to buy 100 per cent of Bisco Misr and would only accept a controlling stake.

It scuppered an effort by Abraaj to snap up the Egyptian company, which is an established brand with three factories in Cairo and Alexandria.

Abraaj, which manages $7.5bn of assets, has invested as much as $1bn in Egypt through its funds.

It was active last month exiting and buying stakes in various entities. It sold its stake in Moulin d’Or, a maker of snacks in Tunisia.

It also sold a 21 per cent stake in Integrated Diagnostics, an Egyptian healthcare company, to Actis, a private equity company based in London.

Also last month, Abraaj bought a stake in Algeria’s biggest logistics company, La Flèche Bleue Algérienne, its first investment in the north African country.

Abraaj owns stakes in high-profile companies including Egypt’s Orascom Construction Industries, the Sharjah-based low-cost carrier Air Arabia and the Spinneys supermarket chain.

Separately, Palm Hills, Egypt’s second-largest listed property developer, said yesterday it planned to increase its capital by 1.65bn pounds through a share issue on the Cairo stock exchange.

The company said in a statement on the bourse website that it had called a shareholders meeting on January 12 to approve the plan, which aims to increase its capital from approximately 2.7bn to about 4.35bn pounds.

Palm Hills plans to issue 824 million shares at a nominal value of 2 pounds each, it said.

Source: The National & Reuters