The bidding war for Egyptian cake and biscuit maker Bisco Misr is intensifying. After Abraaj Investment Management raised the offer price by 12 percent, Kellogg Co K.N. raised its bid too.
Kellog Co. K.N. intensified the bidding war by pushing up its bid for Egyptian cake and biscuit maker Bisco Misr, together with United Arab Emirates’ Abraaj Investment Management that has raised its offer price by 12 percent.
According to the information of Reuters, by raising its offer price to 82.2 Egyptian pounds ($11.50) per share for Bisco Misr that is a well-known brand with three baking facilities in Cairo and Alexandria, the world’s biggest breakfast cereal maker overshadowed Abraaj’s previous offer of 80.58 pounds ($11.27). Abraaj initially offered 73 pounds (11.50 $) per share at the beginning of this month, which Kellogg countered last week with 79 (11.27 $) pounds. The bidding war is part of a whirl of mergers and rights issues raising activity on the Cairo bourse. The Cairo Bourse has struggled to arouse investor confidence again during the political and economic turmoil realized after popular riots in 2011.
Egypt’s government this year made lots of long-delayed reforms. The reforms aimed at drawing back foreign investors and promoting growth while cutting a ballooning deficit.
The bidding war between Kellogg and Abraaj is the latest sign that foreign investors are returning to the market. Abraaj, which has about $7.5 billion of assets under management, commonly invests in high-growth sectors in emerging markets. While shareholders with 56 percent of Bisco Misr agreed to sell to Abraaj, Kellogg’s bids have forced the private equity firm to return with higher offers.
Food is seen as a growing sector in the most populous Arab nation of 86 million people.