OCI shareholder Oceanwood presses board to revise $4.7 cash offer in Orascom merger battle

OCI Global has released correspondence from activist investor Oceanwood Capital Management, shedding light on growing tensions over a proposed €4.1 ($4.66)-per-share cash offer and the broader structure of its planned combination with Orascom Construction.

The Amsterdam-listed chemicals and fertilizer group said the letters, dated June 22 and June 24, were published at Oceanwood’s request for transparency, stressing that the views expressed belong solely to the investor and were not independently verified by the company.

Oceanwood challenges €4.1 ($4.66) cash offer
Oceanwood, which holds roughly 2.34% of OCI’s shares, welcomed the emergence of a cash offer from NNS Holding as “a step in the right direction,” but argued that a cash-only structure undervalues minority shareholders.

According to the investor, the €4.1 ($4.66) offer falls significantly below the implied value of the existing share-exchange deal with Orascom. Based on recent market prices, Oceanwood estimates the net implied value at about €5.39 ($6.31) per share after accounting for a 15% Dutch withholding tax applied to minority investors.

This gap of approximately €1.29 ($1.47) per share, around 24% of the implied value, means shareholders accepting the cash offer would forgo substantial upside, Oceanwood said.

The fund is pushing for a revised structure that combines a guaranteed cash floor with the option for minority shareholders to elect shares in Orascom, arguing this would create a “fair and balanced outcome” and help narrow the discount at which OCI stock trades.

Oceanwood calls for dual-option structure
In its earlier June 22 letter, Oceanwood proposed a €4.21 ($4.79) per-share cash backstop, designed as a liquidity option for investors unable to hold Abu Dhabi-listed Orascom shares due to regulatory, mandate, or tax constraints.

While acknowledging the latest €4.1 ($4.66) offer is lower than its proposed floor, Oceanwood signaled willingness to support the deal if it includes share-election optionality. Such a structure, it said, would preserve access to higher implied value while providing a guaranteed exit route.

The investor also highlighted structural inequalities, noting that minority shareholders face withholding tax on distributions, unlike the controlling shareholder, creating what it described as an uneven playing field.

OCI distances itself from shareholder views
OCI emphasized that the publication of the letters should not be interpreted as endorsement of Oceanwood’s position. The company reiterated that it will continue to update the market in line with regulatory disclosure requirements.

The dispute comes at a critical stage for OCI’s planned combination with Orascom Construction, backed by Egyptian billionaire Nassef Sawiris, as stakeholders seek to resolve governance concerns and align on deal terms.

What’s next for OCI?
With deadlines approaching and regulatory scrutiny ongoing, pressure is mounting on OCI’s board to find a resolution that satisfies both controlling and minority shareholders.

Oceanwood has indicated it may withdraw support for ongoing legal challenges if a revised structure is agreed, potentially paving the way for a smoother completion of the transaction.

For now, the outcome hinges on whether OCI and its stakeholders can reconcile differences over valuation, tax treatment, and shareholder choice, factors that will ultimately determine the fate of one of the most closely watched corporate restructurings involving the group.