Egyptian Financial Supervisory Authority blocks EFG Hermes-QInvest joint venture (By IFN)

GLOBAL: The Egyptian Financial Supervisory Authority (EFSA) has put a spanner in the works of a planned joint venture between EFG Hermes and QInvest, after the deal received approval from EFG Hermes’s shareholders.

According to Ashraf El-Sharkawy, the head of the EFSA, who announced the regulators' decision to suspend the transaction in a report by Egypt’s state news agency, EFG Hermes failed to clarify to its shareholders a number of points with regard to the deal; including the fate of minority shareholders.

The authority has now ordered EFG Hermes to reconvene a shareholders’ meeting, providing the required information, in order to complete the transaction. The investment bank’s shareholders approved the deal at a meeting on the 2nd June 2012.

EFG Hermes's planned venture with QInvest will see the creation of EFG Hermes Qatar, in which the parties will own 40% and 60%, respectively. EFG Hermes will also transfer ownership of its brokerage, research, asset management, investment and infrastructure fund subsidiaries to the new entity. The Egypt-based bank will also transfer 60% of the seed capital held in its asset management business to QInvest.

This is not the first disruption the two parties have seen in their bid for a tie-up. Shortly following the announcement of the deal, Planet IB, a firm made of up Egyptian and Gulf investors, approached EFG Hermes with a takeover offer. However, the bank rejected the offer, despite receiving an offer worth around US$1.1 billion.

See: http://redmoney.newsweaver.co.uk/1smhlg39quqh38rwoni3wx?email=true&a=6&p=26158235&t=21723385