Standard Chartered, the British-based Asian banking group yesterday pulled out of talks to take over Egyptian American Bank (EAB), citing uncertainty over prospects in the Middle East.
EAB said in a statement to the Egyptian stock exchange that the bank's main shareholders had now taken the company off the market and would press ahead with developing its corporate, consumer and treasury businesses. American Express has a 40 per cent stake in EAB and the Egyptian state-owned Bank of Alexandria owns 32 per cent. The rest is publicly traded.
The takeover talks had been suspended in the wake of the 11 September attacks on the United States because of global economic uncertainties, but had resumed at the end of November.
James Vaughan, the managing director of EAB, said that Standard Chartered "has decided not to pursue the acquisition of Egyptian American Bank". Mr Vaughan died in Cairo on Tuesday evening immediately after approving the statement.
Tim Halford, a spokesman for Standard Chartered, said: "We've done our due diligence. It's a good bank, it's a well-managed bank. There was time pressure on their side to get a deal done, but the difficulty for us is that in the current climate, with continuing uncertainty in the Middle East, we are not wishing to invest in the Middle East."
Analysts said the decision by Standard Chartered, headed by the executive chairman Sir Patrick Gillam, not to buy the bank was a blow to the Egyptian economy as it would have brought in much-needed foreign currency. The Egyptian pound was devalued last week after a post-September tourism slump hit foreign exchange earnings.
Shares in Standard Chartered fell 10p to 794p.Reuse content