Cairo firm in bid to purchase brokerage house in Karachi
KARACHI: One of the largest investment banks operating in the Middle East has shown interest in acquiring a majority stake in Invest and Finance Securities (IFS), a Karachi-based brokerage house.
In a securities filing on Friday, Bank Alfalah said its client EFGHermes Holding Company (EFG) wants to acquire up to 51 per cent shares in the Karachi-based securities company.
Speaking to The Express Tribune, IFS Chairman and CEO Muzammil Aslam said the Cairobased EFG will be the first multinational company to invest in Pakistan’s brokerage industry.
“Global investment banks have done business in Pakistan’s equity market, but EFG will be the first one to actually have its own skin in the game as a majority shareholder of a local brokerage house,” he said.
With paid-up capital of $1.2 billion, EFG is one of the biggest brokerage houses in the Middle East. It operates in Egypt, United Arab Emirates (UAE), Kuwait, Oman, Jordan and Saudi Arabia with indirect access to six more markets through a network of partners.
It has managed transactions of mergers and acquisitions amounting to over $53 billion in the last 10 years across the Middle East. Further, EFG will conduct due diligence to acquire up to 10.2 million shares, or 51 per cent of issued capital, of IFS.
In case of a favourable outcome of the due diligence exercise, EFG will sign a share purchase agree- ment with the majority shareholders of IFS besides extending a tender offer to buy shares from its minority shareholders.
IFS was in the news just a few months ago when its original owners sold the company to a group of six acquirers led by veteran stock market analyst Muzammil Aslam.
Aslam currently owns 18 per cent shares in IFS. Along with Chief Operating Officer Asim Ali who owns a 7 per cent stake, the duo currently has management control of IFS. With the rest of the four acquirers, they control 78 per cent shareholding between them. Remaining 22 per cent shares constitute the free float of IFS on the Pakistan Stock Exchange.