CAIRO - Egyptian investment firm Arabiyya Lel Estithmaraat said Thursday it had scrapped a plan to take over the historic Omar Effendi department store chain after unsatisfactory results from a due diligence process. In October, Arabiyya had agreed in principle to buy an 85 per cent stake in the chain for 320 million Egyptian pounds ($55 million). "The results that the special report reached in the due diligence process were not satisfactory," a statement from the company said. "The previously signed contract was contingent on due diligence and therefore it is no longer valid." Arabiyya Lel Estithmaraat, which finances infrastructure, real estate and industrial projects, had said it planned to update the chain, which has about 80 stores throughout Egypt. Omar Effendi, founded in 1856 as Orosdi Back, has long dominated Egypt's retail sector. It changed hands and acquired its current name in the 1920s before being nationalised in 1957. The Saudi-owned Anwal group purchased control of the chain from the government in 2006. An Egyptian state-owned firm still holds 10 per cent of the shares and the World Bank 5 per cent. Arabiyya's shares, which soared 9.6 per cent after the deal was first announced, dropped 1 per cent in early trade yesterday, while the benchmark index .EGX30 was unchanged.
