ISLAMABAD: Intermarket Securities Limited, a Karachi-based brokerage firm, is looking to acquire a majority controlling stake in EFG Hermes Pakistan Limited (EFGH). The announcement comes after Cairo-based EFG Hermes Holding, the parent company of EFGH, is looking to exit Pakistan, Jordan, and another unnamed market in order to streamline its global operations.
In a notification to the Pakistan Stock Exchange (PSX), EFGH announced, “Multiline Securities Limited … has announced that on behalf of Intermarket Securities Limited (herein referred to as the “Acquirer”), it has submitted the Acquirer’s public announcement of intention to acquire at least 51% shareholding and control of EFG Hermes Pakistan Limited.”
After the announcements by JS Global Capital Limited (JSGCL) and AKD Group last month, Intermarket Securities becomes the third firm which is looking to acquire EFGH. On January 17th, JSGCL announced its intention to acquire a 51% stake in EFGH. The board of JSGCL provided their “in-principle consent and approval to invest into and acquire majority shares and control of EFG Hermes Pakistan Limited”, subject to regulatory approvals. On the next day, Topline Securities, on behalf of the AKD Group, also announced its intention to acquire a 51% majority stake in EFGH.
EFG Hermes Holding (Egyptian Financial Group Hermes Holding Company) is a leading financial services company present in the Middle East, North Africa, Sub-Saharan Africa, and South Asia regions. It started in Egypt in 1984, and in 30 years expanded to UAE, Saudi Arabia, Oman, Kuwait, Jordan, Kenya, Nigeria, UK, US, and Pakistan.
The company specializes in securities brokerage, asset management, investment banking, private equity and research in addition to finance lease, factoring, microfinance, financial technology, mortgage, and insurance.
When the company inaugurated its office in Pakistan in 2017, it became the first foreign investment bank to directly enter the market since 2008 and the first foreign broker to have a local footprint in Pakistan. The firm acquired Pakistani brokerage Invest and Finance Securities Ltd. (IFSL), which was operating since 1999, and renamed it as EFG Hermes Pakistan Limited.
EFG Hermes looks to exit Pakistan and Jordan
Last month, EFG Hermes Holding announced it was pursuing exit options from two markets namely Pakistan and Jordan, and is currently in advanced stages of agreeing on an exit from a third market that is yet to be announced.
The move comes in light of EFG Hermes’ efforts to drive shareholders’ value as it continues to look at simplifying its operations and directing its resources to opportunities aligned with its core strength, according to a press release.
EFG Hermes said: “Given our strong belief that these markets’ economic and capital markets potential remains very high, EFG Hermes will remain committed to serving its institutional clients base pursuant to our expected exits.”
The financial services firm also added that the exit from Pakistan and Jordan will not have any material impact on its revenues, as their combined revenues represented less than 1% of the Group annual revenues.
The company further stated that it remains strongly committed to the remaining core markets in which it operates, noting that it enters 2023 with a balance sheet that is extremely healthy with a net cash position that will be positively impacted by the exits. The three contemplated exits will have minimal impact on the company’s 2023 financial statements, EFG Hermes revealed.
