Electrolux prepares to revive Olympic flame
Once considered a casualty of the revolution, the sale of Egypt's Olympic Group Financial Investments was given new life yesterday.
Electrolux said it decided to go ahead with its acquisition of Olympic, an Egyptian appliance manufacturer, and would offer 40.60 Egyptian pounds per share, valuing the company at 2.4 billion pounds.
Electrolux, the Swedish applicance maker, had tentatively agreed to buy the company last October but delayed the decision because of the revolution in Egypt early this year.
"This is a very good deal for shareholders, putting the shares at a 12.5 per cent premium to [Sunday's] closing price," Ingy El Diwany, an analyst at Commercial International Brokerage in Cairo.
Ms El Diwany said the deal exceeded her valuation of 31.5 pounds per share and the average of 33 pounds per share that other brokerage houses had set. Because of the volatile economic conditions, Olympic has struggled recently.
"If the deal was not executed, I don't believe there would be value [for shareholders] this year, given the 35 million pounds of losses in the first quarter," Ms El Diwany said. The offer is expected to be finalised late this month or early next month. Electrolux also said it planned to delist Olympic's shares from the Egyptian stock exchange once the sale was complete.
Olympic, regarded as a leading manufacturer of appliances in the Middle East with a market share of about 30 per cent in Egypt, has had a relatively narrow international presence. About 90 per cent of its sales are allocated to the local market.
Analysts said Electrolux's takeover would give it an entry into the Middle East and give its Egyptian operations more of an international focus.
Olympic gained 6.6 per cent to close at 38.4 pounds. That is its highest price since January, when the Egypt Exchange was forced to closed down amid nationwide protests against the regime of Hosni Mubarak.
Electrolux fell 2.2 per cent to 150.40 Swedish crowns.