Electrolux to buy Egypt's Olympic
By Simon Johnson |
October 12, 2010, Tuesday
|
Print Edition
Print Edition
SWEDEN'S Electrolux has agreed in principle to buy Egypt's Olympic Group, the biggest appliance maker in the Middle East and North Africa, in a push to capture growth in emerging markets.
The world's second-biggest maker of fridges, vacuum cleaners and cookers has had a commercial partnership with Olympic in the region for the last 30 years, letting it distribute brands such as Electrolux, AEG, Frigidaire and Zanussi.
Electrolux said yesterday it had tentatively agreed to pay owner Paradise Capital 45.30 Egyptian pounds (US$8) per share for a 52 percent stake and launch an offer for the rest of the company on completion of the deal at the same price.
Based on Olympic's 60 million listed shares, that makes the initial purchase price worth around USD$480 million before Paradise buys back two non-core units.
Olympic shares had closed on October 7 at 30.06 pounds.
"(The deal) means that investors can sell at a premium of 50 percent from current prices ... it is a huge premium," said Hamed Hashem, equities analyst at investment bank Beltone Financial.
"And if they opt to stay, the company has very good potential."
Olympic's shares surged nearly 43 percent on the news, while Egypt's main index was flat.
Electrolux shares gained 4 percent, outpacing an 0.5 percent rise in Stockholm's blue-chip index .
Following an announcement of the mandatory tender offer for up to 100 percent of Olympic Group, Paradise will launch a tender offer to re-acquire two Olympic non-core assets, Namaa and B-Tech, for 13.88 and 3.44 Egyptian pounds per share respectively.
Excluding Namaa and B-Tech, the enterprise value of Olympic will be about 2.7 billion Egyptian pounds, Electrolux said.
Electrolux said Olympic Group had sales of around 2.1 billion Egyptian pounds in 2009 and an estimated volume market share of approximately 30 percent in Egypt.
The world's second-biggest maker of fridges, vacuum cleaners and cookers has had a commercial partnership with Olympic in the region for the last 30 years, letting it distribute brands such as Electrolux, AEG, Frigidaire and Zanussi.
Electrolux said yesterday it had tentatively agreed to pay owner Paradise Capital 45.30 Egyptian pounds (US$8) per share for a 52 percent stake and launch an offer for the rest of the company on completion of the deal at the same price.
Based on Olympic's 60 million listed shares, that makes the initial purchase price worth around USD$480 million before Paradise buys back two non-core units.
Olympic shares had closed on October 7 at 30.06 pounds.
"(The deal) means that investors can sell at a premium of 50 percent from current prices ... it is a huge premium," said Hamed Hashem, equities analyst at investment bank Beltone Financial.
"And if they opt to stay, the company has very good potential."
Olympic's shares surged nearly 43 percent on the news, while Egypt's main index was flat.
Electrolux shares gained 4 percent, outpacing an 0.5 percent rise in Stockholm's blue-chip index .
Following an announcement of the mandatory tender offer for up to 100 percent of Olympic Group, Paradise will launch a tender offer to re-acquire two Olympic non-core assets, Namaa and B-Tech, for 13.88 and 3.44 Egyptian pounds per share respectively.
Excluding Namaa and B-Tech, the enterprise value of Olympic will be about 2.7 billion Egyptian pounds, Electrolux said.
Electrolux said Olympic Group had sales of around 2.1 billion Egyptian pounds in 2009 and an estimated volume market share of approximately 30 percent in Egypt.
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