Abraaj bows out of bidding for Egypt’s BiscoMisr

Abraaj has been locked in a bidding battle with Kellogg since November. Daniel Acker / Bloomberg News

Abraaj Group has withdrawn from bidding to acquire Egypt’s BiscoMisr after Kellogg, the world’s biggest cereal maker, upped its offer again for the country’s largest listed confectionery maker.

Abraaj, the biggest private equity firm in the Middle East and North Africa, had been locked in a bidding battle with Kellogg since November when the Dubai-based firm made its initial offer of 73.91 Egyptian pounds per share.

Kellogg’s new offer of 89.86 pounds a share, approved by the Egyptian Financial Supervisory Authority (Efsa) on December 25, was 2 per cent higher than Abraaj’s last offer of 88.09 pounds a share made on December 24.

BiscoMisr shares closed at 87.96 pounds on Wednesday, a fall of 2.3 per cent from the previous day. They are up 10 per cent since the bidding war erupted.

Abraaj said that it had decided it would withdraw completely from the bidding process for BiscoMisr.

Hotly contested bidding for BiscoMisr is another sign that foreign companies are returning to invest in Egypt, the Arab world’s most populous country, as the government enacts a raft of reforms to attract foreign investors who had left following the Arab Spring uprising in 2011.

“Abraaj believes that the fair, orderly and transparent bid process for BiscoMisr clearly validates the growing investor interest in Egypt,” the company said.

“Abraaj is positive on the long-term prospects of the consumer sector specifically, and the investment opportunities in general, in Egypt. We expect to see significant investment activity in the country over the coming months given Egypt’s attractive underlying growth potential and its recent positive economic traction.”

Egypt’s Arab Dairy Products, or Arab Dairy, is also the subject of a takeover war between Europe’s biggest dairy group, Lactalis, Saudi Arabia’s Arrow Food Distribution and the financial firm Pioneers Holdings, and Egypt’s El Nour Dairy Products.

The regulator has extended the bid deadline to January 15 to allow bid participants to present counter offers for Arab Dairy.

Lactalis had offered 66 pounds per share in November, topping at least two rival bids for the Egyptian cheese maker.

Arab Dairy shares have been unchanged since July last year.

Abraaj, which manages US$7.5 billion of assets, has invested as much as $1bn in Egypt through its funds.

Abraaj has been active in December exiting and buying stakes in various entities. It sold its stake in Moulin d’Or, a snacks maker in Tunisia.

It also sold a 21 per cent stake in Integrated Diagnostics, an Egyptian healthcare company, to Actis, a private equity company based in London.

Also in December, Abraaj bought a stake in Algeria’s biggest logistics company, La Flèche Bleue Algérienne, its first investment in the north African country.

Abraaj owns stakes in high-profile companies including Egypt’s Orascom Construction Industries, the Sharjah-based low-cost carrier Air Arabia and the Spinneys supermarket chain.