First Abu Dhabi bank in talks to buy EFG Hermes: Sources

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First Abu Dhabi Bank has made an offer to buy a controlling stake in Egypt’s biggest investment bank EFG Hermes that values the North African lender at $1.1 billion, a regulatory statement said.

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FAB, the UAE’s biggest lender, made a non-binding offer to buy at least 51 percent in EFG Hermes for 19 Egyptian pounds ($1.21) a share, Egypt’s Financial Regulatory Authority said.

If the deal succeeds, it would mark FAB’s second major transaction in Egypt after it bought the Egyptian business of Lebanon’s Bank Audi last year.

Under Egyptian rules, a party seeking to buy more than one third of a listed company must make a mandatory tender offer for all remaining shares, lawyers say.

EFG Hermes said in a disclosure on the London Stock Exchange the transaction’s completion and final purchase price would be conditional on the completion of “a satisfactory comprehensive due diligence” and on the required regulatory approvals.

After that, a mandatory tender offer would be made to all shareholders.

Rothschild is advising FAB on the deal, two sources familiar with the matter said.

FAB and Rothschild did not immediately respond to a Reuters request for comment.

FAB wants to keep the Egyptian investment bank independent, the sources said, potentially ruling out a combination with the Abu Dhabi lender.

The purchase of EFG Hermes would allow FAB to gain access to the Egyptian investment bank’s strong investment banking franchise in the Middle East and North Africa region.

EFG Hermes has advised on major deals including Saudi Aramco’s record $29.4 billion initial public offering in 2019.

First Abu Dhabi Bank, which came out of a 2017 merger between National Bank of Abu Dhabi and First Gulf Bank, has successfully advised on IPOs in the UAE and loan deals in the region.

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