EFG-Hermes takes legal steps against unwanted suitor Planet

 EFG-Hermes said yesterday it was taking legal measures to protect the company and its shareholders from an unwanted takeover attempt, raising the stakes in a battle for control of Egypt’s biggest investment bank.
Planet IB, a group of wealthy Arab investors, said last week it intended to offer 13.50 Egyptian pounds per share to buy EFG, a price that would value the bank at 6.46bn Egyptian pounds ($1.1bn).
But EFG shareholders voted on Saturday to press ahead with an earlier plan to tie up with Qatar’s QInvest in a venture that would give the Qatari firm control over EFG’s main businesses. EFG’s shares fell 2.1% yesterday to 11.01 pounds each.
Egyptian share prices have tumbled since the uprising that ousted President Hosni Mubarak last year and many investors have been looking to snap up assets seen as undervalued.
EFG shares have plunged about 60% during that time and the bank came under further pressure last week when its two chief executives were referred to trial alongside Mubarak’s two sons as part of a probe into illegal share dealings.
EFG has dismissed the offer by Planet as not serious, saying it should have filed its bid with the regulator and given shareholders better assurances.
Planet has asked Egypt’s regulator to suspend the Qinvest deal to give it time to examine EFG’s books.
Yesterday, it said it was prepared begin the due diligence immediately and to match the financial and legal guarantees as well as other undertakings made by QInvest.
Analysts say Planet could potentially make a hostile bid for EFG, but that it may face regulatory hurdles. Such a bid would be the first in Egypt’s history.
Planet is led by the former chairman of Cairo-based AlexBank and the former managing director of Citadel, Egypt’s biggest private equity group.
It says it has financial backing from Egyptian businessman Naguib Sawiris, a member of the ruling family of Sharjah and a top Bahraini financial institution, but EFG says it has been vague on details.
In an e-mailed statement, EFG said it was “taking the necessary legal steps to protect the rights of the company, its shareholders and its employees against a media campaign that Planet IB has launched,” without saying what those legal steps were.
It accused Planet of misleading the market with “confusing and inaccurate information and causing damage to the company, its shareholders and those trading on its shares.”
In the QInvest deal, EFG would fold its brokerage, research, asset management, investment banking and infrastructure fund businesses into a new venture called EFG-Hermes Qatar that would be 60% owned by the Qatari partner. QInvest would also provide $250mn to increase its capital.