HeidelbergCement Group is proposing to launch a tender offer to increase its 55.08% stake in its subsidiary, the Suez Cement company (SUCE), to the full 100% stake listed on the Egyptian Exchange (EGX).
Details of the offer are expected to be announced on Tuesday by the Financial Regulatory Authority (FRA).
SUCE also announced that its Board of Directors is discussing the launch of a tender offer to acquire up to 100% of its subsidiary Tourah Portland Cement (TORA). This would take place at a price of EGP7.18/share, and to be followed by a voluntary delisting of shares from the EGX.
Naeem Research expects that the tender offer price for SUCE will be based on the average traded price stipulated as per legal requirements. SUCE currently owns 66.12% of TORA, with the tender offer price standing at a discount of 6% to market price, valuing the whole subsidiary at EGP 513m.
The company had recently impaired its investment in the subsidiary, following the shutdown of all its production lines due to continuing losses. The subsidiary, however, owns a 500ksqm plot of land in Tourah, which was in the process of being converted into real estate from industrial.
There remains minimal clarity on the timeline of completion. SUCE had previously attempted to sell the land plot at an estimated minimum of EGP 900m while working on changing the land’s licence from industrial to residential.
Naeem Research added that it is awaiting the full disclosures with regards to the tender offer price for SUCE and regulatory approvals