Both companies confirmed they were in talks with Bisco Misr over the summer, but Abraaj was the first to make a formal bid at the star of November, offering US$119m, or EGP73.91 per share, for up to 100% of the company. The bid, which valued Bisco Misr at less than the company’s EGP79.80 share price as of 2 November, was conditional on Abraaj being able to acquire at least 51% of the company.
Earlier this week, after shareholders owning 56% of Bisco Misr had agreed to Abraaj’s terms, Kellogg topped that bid with an offer of US$127.2m, or EGP79 per share, also conditional on owning 51% of the firm. Abraaj immediately upped its bid by 2% to EGP80.58 per share, or US$129.74m.
At the time of writing, neither bidder was confirmed to be successful. Abraaj announced it had started buying up Bisco Misr shares on the open market as of 21 November, with Kellogg saying it would do the same, starting at the end of this week.
After its initial bid had been accepted by a majority of shareholders, Abraaj issued a statement, saying: “In the event the offer is successful, Abraaj will work closely with [Bisco Misr’s] Egypt-based management and provide full support to Egyptian industry expert, Mohamed El-Rashidi, as incoming executive chairman of the company to develop and grow the Company into a pre-eminent Egyptian branded snacks business based in Egypt, managed from Egypt and targeting the local and export markets.
“Abraaj has developed a robust value creation plan for the company with a strong emphasis on corporate governance. Abraaj will further draw on its significant industry experience and strong regional and global networks to create expansion and export opportunities for the Company as well as develop new products that will form part of a compelling offering in sweet and savoury snacks,” the statement added.
Rival bids rejected
Earlier this year, Saudi Arabia’s Savola Group also announced it had started proceedings to acquire a stake in Bisco Misr. But in September, after completing due diligence alongside Abraaj and Kellogg, Savola said it no longer intended to pursue its acquisition of the company.
Bisco Misr has also seen recent bids from Juhayna Foods and Halwani Bros, both of which it turned down. Last year Kraft Foods was reported to have made an offer for the firm, also without success.
The company, which owns three bakeries in Cairo and Alexandria, has seen its profits fall this year, despite rising sales. In its latest results statement, Bisco Misr revealed it had seen its net profits after tax for the first nine months of 2014 fall to US$5.23m, compared to US$6.22m for the same period last year.