Olympic Group said today that Electrolux, which has a preliminary agreement to buy the Egyptian appliance maker, will extend due diligence checks on the $370 million deal by 15 days.
Electrolux said in October it had agreed to buy Olympic but the acquisition process was suspended during the political unrest that led to the overthrow of President Hosni Mubarak.
Olympic said in a statement to the Egyptian stock exchange that it agreed with Electrolux to “extend the period for completion of the deal by a maximum of 15 days”.
“That is to enable Electrolux to complete its due diligence and allow the parties a chance to complete negotiations and sign the contract to sell the shares and the contracts related to the deal,” the statement said.
Electrolux said in October it would pay Olympic’s owner Paradise Group 45.30 pounds per share for a 52 percent stake and then launch an offer for the rest of the company on completion of the deal at the same price.
Paradise would launch a tender offer to re-acquire two Olympic non-core assets, Namaa and B-Tech.
The net cost of the deal, excluding the sales of non-core subsidiaries, is 2.2 billion Egyptian pounds ($370 million), an Electrolux spokesman said in October.
Olympic’s shares closed at 34.80 pounds on Monday, down 15 percent this year.
In an interview with Reuters in March, Electrolux’s chief executive, Keith McLoughlin, would not say whether a new price was being negotiated.
The full press release form Olympic is as follows:
The continued success of this cooperation encouraged the two parties to transform the ongoing relationship into a strong alliance and extending it to include other leading brands under the Electrolux umbrella, namely AEG, Frigidaire and Electrolux; using Olympic Group as an export hub for Electrolux products in Egypt and the North African region.
Accordingly, on October [10th] 2010, Olympic Group has been notified that Paradise Capital (“PC”) the owner of 52% of Olympic Group, and Electrolux signed a Memorandum of Understanding (the “MOU”) outlining the basic terms of a transaction, whereby PC has agreed to sell its majority 52% stake in Olympic Group to Electrolux at a price per share of LE 45.30 (including Olympic Group’s current holdings in Namaa Real Estate Development & B-Tech for Trade & Distribution [Namaa& Btech]) with a commitment on the part of Electrolux to launch a Mandatory Tender Offer for up to 100% of Olympic Group at the same price. The acquisition and pricing is subject to a number of conditions including due diligence to be conducted by Electrolux on Olympic Group as well as obtaining all required approvals.
The scope of the contemplated transaction covers only Olympic Group’s core business of household appliances and does not include its non-core businesses, namely Namaa and B- Tech. As per the terms of the MOU, it was therefore agreed that following the announcement of the Mandatory Tender Offer for up to 100% of Olympic Group, Paradise Capital will launch a tender offer to re-acquire up to 100% of the shares of these two companies at a price of LE 13.88 per share for Namaa and LE 3.44 per share for B-Tech, with both these tender offers being subject to the necessary required approvals.
The MOU provides that after completion and closing of the transaction, Olympic Group will enter into a management agreement with Electrolux and Paradise Capital. Against a management fee Electrolux and Paradise Capital will ensure continued technical and management support to Olympic Group, at terms to be agreed upon in detail at a later stage.
The transaction is subject to a number of conditions including the completion of due diligence. Minority shareholders in Olympic Group, Namaa and B-Tech are advised to exercise caution in trading the shares during the period leading to completion.