(Adds CI Capital CEO comments)
By Ehab Farouk
CAIRO, Dec 17 (Reuters) - Commercial International Bank , Egypt’s largest listed company, said on Thursday it had accepted a 1 billion Egyptian pound ($127.7 million) offer from Orascom Telecom to buy its investment bank subsidiary CI Capital.
Orascom Telecom and Technology (OTMT), which has holdings in media, technology and cable businesses as well as energy, transport and logistics, is expanding into financial services.
It plans to merge CI Capital with Beltone Financial, which it bought last month for almost 650 million Egyptian pounds.
OTMT is owned by Egyptian billionaire Naguib Sawiris, one of the country’s most prominent businessmen and founder of the Free Egyptians political party, which had a strong performance in recent parliamentary elections.
Sawiris was not immediately available for comment.
CIB said in a statement its board had met on Thursday and given preliminary approval for the deal.
“It is important to note that consultations remain in the preliminary stages,” CIB said. “Completion of the sale depends on the results of negotiations between the two sides, the results of due diligence as well as obtaining the necessary approvals.”
CI Capital CEO Mahmoud Attalla told Reuters the deal should be completed in the first quarter of 2016.
OTMT shares were up 11.11 percent at 0.60 pounds by 1402 GMT, while CIB shares rose 5.57 percent to 35.80 pounds.
If approved, the acquisition of CI Capital would mark OTMT’s second major purchase in as many months and cements its foray into the financial services sector.
In November, OTMT and investment bank Act Financial bought 97.3 percent of Beltone Financial. They had originally sought to buy 100 percent of the financial services company for 650 million pounds.
Beltone said in a statement that its parent company, OTMT, planned to merge it with CI Capital once the purchase was completed.
“Beltone Financial Holding will make concerted efforts to support its main shareholder in completing this deal,” it said.
Sawiris had previously tried to acquire EFG Hermes , the largest investment bank in the Middle East, through his New Egypt Investment Fund but the bid was unsuccessful.
Attalla said CI Capital already had expansion plans that it would seek to push ahead with under the new leadership.
“CI Capital has plans for regional expansion and some of this expansion will require new capital expenditure that will be agreed with the new owner if the deal is completed,” he said. ($1 = 7.8300 Egyptian pounds) (Writing by Lin Noueihed; Editing by Jane Merriman)