Egypt's Pioneers to buy Beltone Financial

By Alastair Sharp and Edmund Blair

CAIRO (Reuters) - Egyptian financial services firm Pioneers Holding will buy investment bank Beltone Financial, it said on Sunday, with the all-share deal worth almost $130 million.

Pioneers shares closed up 5.7 percent at 7.06 Egyptian pounds on Sunday, valuing Pioneers at 3.53 billion Egyptian pounds. 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, valuing Beltone at 706 million Egyptian pounds based on Sunday's closing price and giving Beltone shareholders a stake of about 17 percent in the merged firm.

Both companies said the aim of the move was to create a major regional investment bank and Hashem Ghoneim from Pyramids Capital said Pioneers' retail strength fitted well with Beltone's focus on institutions.

"It is definitely something positive for investors," he said, adding that Pioneers shares traded at a discount to its peer EFG-Hermes.

EFG-Hermes shares closed up 1.2 percent, while the main Egyptian market index gained 2 percent.

SEPARATE MANAGEMENT

Beltone said the Pioneers share issue was expected to take place in six to eight weeks, once due diligence and other preparatory work was finalised.