Citadel joint venture buys Egypt media firm stake

CAIRO, Feb 25 (Reuters) - A joint venture of Egypt-based private equity firm Citadel Capital acquired 61 percent of the Egyptian Company for Marketing and Distribution, which owns the financial daily newspaper Al Mal.

The publishing company's chairman and managing director, Hazem Sherif, told Reuters on Monday Al Kateb Publishing Company, of which he owns 51 percent and Citadel owns 49 percent, had acquired 61 percent of the firm at a price to earnings (PE) ratio of 8.

Sherif declined to give the total value of the deal but he said it involved up to 7 million Egyptian pounds ($1.28 million) in capital increase and leveraged buyout.

The company's earnings per share in 2006 stood at 2.6 pounds.

"Al Kateb will give 10 percent of shares to the management through a leveraged buyout, which is the first of its kind for a newspaper in the Middle East," he added.

The company, which launched its daily Al Mal newspaper in January, would increase its capital from 1.5 million pounds to 7.5 million as a result of the transaction.

"We are very close to more expansions with such a shareholder structure including companies like Citadel and EFG-Hermes HRHO.CA(HRHOq.L: Quote, Profile, Research)," Sherif said.

Investment bank EFG-Hermes owns 7 percent of the Egyptian Company for Marketing and Distribution, while other shareholders include Egyptian billionaire Samih Sawiris and Ezz Holding Group for Industry and Investment.

Citadel Capital, which was established in 2004 with less than $500,000 of capital, now controls some $7 billion of investments in oil, agriculture, mining and building materials.

The private equity firm said in January it had raised 456 million pounds in new capital from existing shareholders, bringing its total to 1.65 billion pounds, to finance recent acquisitions, including its purchase of Canadian oil exploration firm Rally RAL.TO in a deal worth $843.2 million. ($1= 5.49 Egyptian pounds) (Reporting by Wael Gamal; Editing by Quentin Bryar)