Kellogg Co, the world's biggest breakfast cereal maker, has offered 908.5 million Egyptian pounds ($127 million) for Egyptian cake and biscuit maker Bisco Misr, setting up a likely bidding war with a UAE investment company.
UAE-based Abraaj Investment Management offered 850 million pounds this month for the Egyptian firm, which earlier refused a takeover bid from Juhayna Foods, Egypt's largest juice maker.
Egypt's financial regulator said that Abraaj's attempt to raise its offer price this week had been received after consideration of Kellogg's initial bid had begun. This means Abraaj would now have to offer a new price at least two percent above Kellogg's if it wishes to make a counter bid.
The Bisco Misr takeover battle is part of a recent flurry of mergers and rights issues that has boosted activity on a Cairo bourse, which had struggled to revive investor confidence during more than three years of political and economic turmoil since the Arab Spring uprisings.
Egypt's government this year launched a raft of long-delayed reforms aimed at luring back foreign investors and shoring up growth while cutting a ballooning deficit.
Kellogg's bid for Bisco Misr is the latest sign that foreign investors could be returning to the market.
The offer from the U.S. cereal and snack maker at 79 Egyptian pounds ($11) per share is above the 73 pounds per share offered by Abraaj.
The offers from Kellogg and Abraaj are for 100 percent of Bisco Misr, and the prospective buyers have said they would accept no less than a 51 percent controlling stake. Abraaj started buying shares on November 21 and Kellogg said it would begin on Thursday.
Bisco Misr owns three baking facilities in Cairo and Alexandria.