Orascom Construction Soars Most Since 2006 on Buyout Tender Approval

Orascom Construction Industries (OCI S.A.E.) (OCIC.CA) headed for the biggest surge in more than seven years after OCI N.V. (OCI) obtained regulatory approval to buy shares of Egypt’s biggest publicly traded company at an 18 percent premium.

Shares of the Cairo-based company surged 10 percent, the maximum allowed in a single trading day and the most on a closing basis since January 2006, to 238.09 Egyptian pounds at 12:55 p.m. in Cairo. Orascom Construction’s market value advanced to 49.8 billion pounds ($7.1 billion). The company known as OCI accounts for 29 percent of the benchmark EGX 30 Index, which jumped 2.6 percent on Wednesday.

OCI shareholders will be allowed to swap their stock for shares in the Amsterdam-based OCI NV or sell them for 255 pounds each, OCI NV said in a statement yesterday after the Egyptian Financial Supervisory Authority approved the tender. The stock closed at 216 pounds yesterday. The approval allows OCI to delist from the Cairo bourse should less than 5 percent of its shares remain outstanding after the tender is completed.

“We recommend taking the cash offer as we believe OCI’s liquidity will likely be negatively impacted subsequent to the completion of the transaction,” Cairo-based Beltone Financial Holding said in a report on Wednesday.

OCI NV shares traded on Euronext Amsterdam increased 4.7 percent to $27.75, or the equivalent of 194.67 pounds, set for the highest close since June 7.

The buyout offer for 50.2 million Orascom shares starts tomorrow and ends July 28, according to an advertisement in state-run Al Ahram newspaper on Wednesday. Cairo-based CI Capital is the deal’s adviser and execution broker.
Source: Bloomberg