Bisco Misr bidding war heats up

The United Arab Emirates’ Abraaj Group has upped its offer for Bisco Misr shares, following an earlier bid by US-based cereal manufacturer Kellogg Company.

Abraaj is now offering LE80.58 per share, amounting to a total purchase price of LE926.67 million, as it seeks to take over the Egyptian confectionery firm.

On Tuesday, market regulator EFSA approved Kellogg’s offer to purchase Bisco Misr shares at LE79, for a total purchase price of LE908.5 million. Kellogg filed its bid with the stock market regulator on November 20.

Bisco Misr, which produces biscuits, cakes, cornflakes and other baked goods at its three Egyptian factories, has been hotly contested for months.

In June, Bisco Misr rejected a takeover bid by dairy and juice manufacturer Juhayna, while in July, Saudi food producer Savola Group requested to start proceeding to acquire a majority stake in the company. However, the bid was dropped in September.

The two outstanding offers, from Kellogg and Abraaj also seek to acquire from 51 to 100 percent control of the company.

Global equity firm Abraaj submitted an expression of interest to Bisco Misr shareholders on July 13. On November 18, regulators gave the bid a green light.

On August 31, Kellogg, the world’s largest breakfast cereal producer put in its own expression of interest, and announced on November 20 that it intended to bid for a majority stake.

Consumer goods, like snack food, have bucked the trend during Egypt’s post-revolution economic slump, reflecting steady consumer demand. With a local market approaching 86 million people, foreign firms appear to have an appetite for this sector of Egypt’s market.