Orascom Investment Eyes Retail Sector Growth With Sarwa Bid
(Bloomberg) -- Orascom Investment Holdings’ bid for a non-controlling stake in Sarwa Capital is part of the group’s strategy to expand in the retail sector, which it sees as the future in Egypt, OIH’s chief executive said on Wednesday.
“We’ve been watching this company for a long time,” Tamer El Mahdi, who also serves as Orascom Investments’ managing director, said in a telephone interview. “It’s a company working in the retail market, which is something we believe is going to grow to a large degree during the next phase, with the economy of Egypt improving.”
OIH, whose chairman is billionaire Naguib Sawiris, announced earlier that it was looking to buy a non-controlling stake in Sarwa, which debuted earlier this month on the Egyptian exchange. The voluntary offer was for either 216 million shares at 7.36 Egyptian pounds per share, or for between 144 million and 216 million shares at 6.62 pounds a piece.
Sarwa’s IPO was oversubscribed, but the company’s stock has been mostly in the red since it began trading, and is down 16 percent from its initial price. It pared the loss on Wednesday, buoyed by the prospect of OIH’s offer, and closed up 10 percent at 6.17 Egyptian pounds.
“We believe in the company, and we believe the price which is currently in the market is very attractive for OIH. We’re looking to have something more than 25%,” said El Mahdi, adding that he isn’t concerned about Sarwa’s share performance. The current slump is “not only in the Egyptian stock exchange. I think this is something more global.”
“The company fundamentals are very strong, and we have no concerns in terms of the stock’s performance since the IPO,” he said.
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