Sale of Beltone chairman Saba's stake suspended

CAIRO Feb 2 (Reuters) - Egyptian investment firm Arabiyya Lel Estithmaraat's (AIC) plan to buy Egyptian businessman Aladdin Saba's stake in investment bank Beltone Financial Holding has run into trouble after Beltone rejected some of AIC's demands.

Beltone and AIC said last month that AIC had agreed to pay 16 pounds per share for Saba's 19.9 percent stake in the investment bank, which he chairs.

The planned deal would be worth 26.8 million Egyptian pounds ($4.5 million), according to Reuters calculations. Saba was to have resigned his post once the agreement was signed.

Beltone said in a statement released late on Wednesday that AIC had made unacceptable demands over the terms of some of Beltone's commitments.

"Because of this unjustified position taken by AIC, it has been decided not to go ahead," Beltone said.

AIC is considering whether to carry on with its purchase plan. "With the many problems the company is facing, we wish to mention that the company (AIC) is currently studying whether to continue with the transaction or not," AIC said in a statement released by the stock exchange on Thursday.

According to Reuters data, Beltone has a market capitalisation of 114 million pounds.

AIC had already been building a stake in Beltone and the acquisition would have taken its holding to 30 percent.

Beltone's thinly-traded stock plunged 9.9 percent, close to 10 percent limit allowed under exchange rules, while AIC's stock fell 5 percent.

The benchmark index was down 2.1 percent, mainly due to soccer violence on Wednesday that killed 74 people, traders said.

Egyptian investment banks were hit especially hard when foreign investors pulled out of the country and activity on the stock exchange slumped following an uprising that ousted President Hosni Mubarak in February last year.

($1 = 6.0285 Egyptian pounds) (Reporting by Patrick Werr. Editing by Jane Merriman)