Egypt's Pioneers to buy Beltone Financial

By Alastair Sharp

CAIRO (Reuters) - Egyptian financial services firm Pioneers Holding (PIOH.CA: Quote, Profile, Research) will take over investment bank Beltone Financial in an all-share deal.

Pioneers shares were up 7 percent at 7.15 Egyptian pounds ($1.31) by 1149 GMT, valuing the company at 3.575 billion Egyptian pounds ($654 million). The stock had jumped by a similar margin last Wednesday when talks between the firms first came to light.

Pioneers, with a leading position in Egypt's retail market, said it would issue 100 million new shares to give Beltone shareholders a 17 percent stake in the merged firm.

The management of the two firms will remain separate and unchanged but both will report to a holding company under the plan, Beltone said. The board of the new holding company has yet to be announced.

"The board of directors of Pioneers Holding agreed to merge with Beltone Financial by raising the company's capital and exchanging its shares with the holders of Beltone shares," Pioneers said in a statement.

"It is definitely something positive for investors," said Hashem Ghoneim from Pyramids Capital.

Ghoneim said Pioneers shares are traded at a discount to its peer EFG-Hermes (HRHO.CA: Quote, Profile, Research) and that its expertise in retail fitted well with Beltone's focus on institutions.

EFG-Hermes shares were 1.3 percent higher, while the main index .EGX30 gained 2.2 percent.