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Banking

Planet plots to make a new national champion

Planet Investment Banking raises $1.3 billion; Cites “national interest”

A group of Egyptian and Arab investors have entered the media spotlight after announcing an intention to buy London- and Cairo-listed financial group EFG Hermes. It has even raised the possibility of the region’s first hostile takeover bid, since EFG Hermes shareholders have already approved a separate tie-up with a Qatari firm, QInvest.

Ahmed El Housseiny, chief executive of the group, Planet Investment Banking, tells Euromoney he would help other assets remain in Egyptian hands, potentially including Ezz Steel, whose chairman was jailed after the revolution. Some say Planet’s rival bid for EFG Hermes is symptomatic of the new corporate environment in Egypt, post-revolution, as Gulf groups, particularly from Qatar, try to buy up cheap assets in the country.

"We are a pragmatic, business-oriented company that happened to be born during interesting political times in Egypt," says El Housseiny. "If the national interest coincides with a profitable transaction, then this would take priority."

Ahmed El Housseiny, chief executive of the group, Planet Investment Banking
Ahmed El Housseiny, chief executive, Planet Investment Banking 

Planet says it has financial backing from Egyptian billionaire Naguib Sawiris, among other local and regional investors, amounting to $700 million in debt and $600 million in equity. The chairman, Mahmoud Abdel Latif, is a former chairman of Bank of Alexandria, and El Housseiny is a former managing director of Egyptian private equity firm Citadel Capital. The group says a company such as EFG Hermes should not be lost to foreign firms such as Qatari investment bank QInvest. QInvest agreed in May a $250 million deal to take over the core investment banking assets of EFG Hermes. But last month Planet said it wanted to buy 100% of EFG Hermes, including its private equity and commercial banking arms, in a $1.2 billion deal.

EFG Hermes said in a statement last month that its operations were unaffected by new charges of insider trading levelled against co-CEOs Yasser El Mallawany and Hassan Heikal. It says the men had no personal dealings, interests or benefits with the stock – local lender Al Watany, now owned by National Bank of Kuwait.

El Housseiny says that regardless of the EFG Hermes bid, Planet aims to build the region’s biggest financial services firm via smaller acquisitions and organic growth, advising on M&A deals in the $10 million range. He says Planet is already working on 12 transactions in sectors including tourism, real estate and medical care. Although Planet is for now focusing on Egypt and UAE, he says it will use an UAE office expected from early 2013 to cover Saudi Arabia and other Gulf markets.

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