At an Extraordinary General Meeting, the shareholders of EFG-Hermes approved the subscription to 25% of EFG-Hermes Holding stock by Capital. The resolution received a 99.9% endorsement. With this deal, Abraaj Capital will become the single largest shareholder in EFG-Hermes and will have proportionate representation on the board of EFG-Hermes.
Abraaj Capital will subscribe to 97,074,010 of common shares of EFG-Hermes by way of a capital increase exclusively issued in favour of Abraaj Capital at a price per share of EGP 30 in a transaction valued at EGP 2.9 billion (USD $506 million).
Commenting on the occasion Sheikh Abdulrahman Ali Al Turki, Chairman Abraaj Capital said, “This investment is being directly made by Abraaj Capital, which increased its capital to US$ 1 billion as part of the transaction. Major regional and international institutional investors participated in the capital increase, which was completed in record time, a strong sign of endorsement in the company and its future plan”.
Arif Naqvi, CEO and Executive Vice-Chairman of Abraaj Capital, said: “We thank all the shareholders of EFG-Hermes for showing their faith in the alliance of Abraaj Capital and EFG-Hermes. This transaction is a strategic and long term investment for Abraaj Capital and it shows our confidence and commitment to the future of the Middle East. EFG-Hermes is widely regarded as the leading investment bank in the region and our strategy moving forward will be to catalyze and accelerate the regional development plan of EFG-Hermes to become the foremost integrated financial services institution in the region”.
Abraaj Capital has a strong investor base throughout the region and abroad, including the largest and most progressive institutions, business groups and high net worth individuals in the Middle East. Recognized as the leading Private Equity firm in the region, Abraaj's management team has brought together some of the most compelling and successful transactions in the history of leveraged acquisitions across the Middle East, North Africa and South Asian region. With over US$ 1.5 billion of assets currently under management, Abraaj has pioneered private equity practice in the region. Having announced new funds – the firm will have US$ 4.0 billion of assets under management by year end- making it a leader in the industry.
Yasser El-Mallawany, Chairman and CEO of EFG-Hermes added, “We appreciate the continuous support from our shareholders. Our shareholders have endorsed the board's vote of confidence in Abraaj Capital. We all recognize the strategic value of Abraaj Capital's acquisition of 25% of EFG Hermes, making it the single largest shareholder in our company. The management teams of EFG Hermes and Abraaj Capital will now move swiftly to plan next steps in implementing our strategy of aggressively expanding our regional presence across all business lines.
At close of market on September 2nd, EFG-Hermes stock was trading at EGP 45.10- representing a 53% uplift compared to July 24th – date of Abraaj Capital’s offer to acquire a 25% stake.
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