On August 17th, 2010, the Arab investment bank EFG Hermes Holding SAE entered into an agreement with the existing majority shareholders to acquire a 65% interest in Crédit Libanais S.A.L.'s share capital and a call option over an additional 25% interest. Closing is subject to the approval of the Central Bank of Lebanon and other standard conditions precedent. EFG Hermes will pay a cash consideration of US$542 million for the 65% interest.
The acquisition will be financed from EFG Hermes' own cash resources and will not require any external funding. The call option over the additional 25% will be exercisable over the next two years at the sole discretion of EFG Hermes and at terms, including pricing, same as those applicable to the acquisition of the initial 65%.
The implied consideration of US$834 million for 100% of the Bank's share capital represents a transaction multiple of approximately 2x shareholders' equity. Crédit Libanais recorded for the six months to June 30, 2010 net income of US$36 million, implying a rolling price to earnings multiple of c. 11.5x on an annualised basis and a return on equity of c. 18%.
