Sector News

Kellogg and Abraaj battle for Egypt’s Bisco Misr

November 26, 2014
Food & Drink
(Reuters) – The battle for control of Egyptian cake and biscuit maker Bisco Misr intensified on Wednesday as Abraaj Investment Management raised its initial bid to trump a rival offer from Kellogg Co.
 
UAE-based Abraaj, the Middle East’s largest private equity firm, raised its offer to 80.58 Egyptian pounds ($11.27) per share, exactly two percent above a bid of 79 pounds on Tuesday from Kellogg, the world’s biggest breakfast cereal maker.
 
The bidding war is part of flurry of mergers and rights issues boosting activity on the Cairo bourse, an exchange which has struggled to revive investor confidence during the political and economic turmoil that followed the Arab Spring uprisings.
 
Egypt’s government this year launched a raft of long-delayed reforms aimed at luring back foreign investors and shoring up growth while cutting a ballooning deficit.
 
The competing bids from Kellogg and Abraaj are the latest sign foreign investors could be returning to the market.
 
Food is seen as a fast-growing sector in the most populous Arab nation of 86 million people and Bisco Misr is a well-known brand with three baking facilities in Cairo and Alexandria.
 
Abraaj, which has about $7.5 billion of assets under management, typically invests in high-growth sectors in emerging markets. It first approached Bisco Misr in July and made a formal offer of 73.91 pounds in November.
 
While shareholders with 56 percent of Bisco Misr agreed to sell to Abraaj, Kellogg’s bid forced the private equity firm to return with a higher offer.
 
Egypt’s regulator had instructed Abraaj to offer a new price at least two percent above Kellogg’s if it wished to make a counter bid. Abraaj’s latest offer of $129.6 million represents an increase of exactly two percent on Kellogg’s bid.
 
The offers from Kellogg and Abraaj are for 100 percent of Bisco Misr, and both have said they would accept no less than a 51 percent controlling stake. Abraaj started buying shares on November 21 and Kellogg said it would begin on Thursday.
 
($1 = 7.1500 Egyptian pounds) 
 
By Ehab Farouk (Writing by Stephen Kalin; editing by David Clarke)

comments closed

Related News

October 2, 2022

Drinktec 2022: In review

Food & Drink

In the lead-up to the world-famous Oktoberfest – which celebrates Bavarian tradition, beer and the festival spirit – Munich was already buzzing with activity by the time the doors opened to Drinktec 2022 on 12-16 September. The atmosphere was lively, with approximately 50,000 visitors from 169 countries in attendance.

October 2, 2022

Alan Jope to step down as Unilever CEO

Food & Drink

Unilever has announced CEO Alan Jope’s decision to retire from the company at the end of 2023, after five years at the helm. The announcement comes less than a year after a failed attempt by Unilever to buy GlaxoSmithKline’s consumer healthcare business and just months after activist investor Nelson Peltz joined the company’s board.

October 2, 2022

Lakeland Dairies names Colin Kelly as next group CEO

Food & Drink

Lakeland Dairies has announced that Colin Kelly will assume the role of group CEO following the retirement of Michael Hanley at the end of the year. Kelly will take up the position in January 2023, while Hanley will step down in December this year.