National Société Générale Bank Egypt's (NSGB) shares shook as markets digested a US$2.5bn takeover offer being tabled by Qatar National Bank (QNB).
Shares in the Egyptian arm of France's second-biggest lender rose as much as 10 per cent to hit intraday trading limits yesterday, then fell back 4.7 per cent to 33.77 Egyptian pounds each.
QNB reached a deal to acquire SocGen's 77.1 per cent stake in the bank last week, which will be followed by a tender for the bank's remaining shares.
"It's disappointing for the market, but within our expectations," Sara Boutros, a banking analyst at Cairo-based Beltone Financial Holding, told Bloomberg News.
"Some investors had expected much higher multiples, but in the end QNB got a very good deal because SocGen prioritised capital adequacy over profitability."
SocGen is among several French banks looking to shore up its capital reserves through sales of Egyptian banking units. NSGB's shares plummeted last week because the price being offered by QNB was far below its market value.
Egyptian stocks gained in trading yesterday as the country's constitutional referendum proceeded peacefully. The EGX30 index of Egyptian equities advanced 2.7 per cent to 5,303.62.
Aside from NSGB, all other stocks gained, with Orascom Construction Industries and Commercial International Bank leading the way.
A treasury bill auction also successfully raised 5 billion Egyptian pounds, with borrowing costs declining for the country's government.
The Saudi Tadawul ended the trading session up 0.4 per cent at 6,851.16, led by heavyweight stocks including Sabic and Saudi Kayan Petrochemical Company.