Egypt Rejects France Telecom’s Mobinil Bid Appeal
France Telecom SA’s appeal was rejected in its bid to buy the remaining shares of the Egyptian Co. for Mobile Services, said Khaled Seyam, deputy head of Egypt’s financial regulator.
A committee of three Egyptian judges “has supported the regulator’s decision to reject the bid,” Seyam said in an interview after the meeting in Cairo. He didn’t elaborate. France Telecom plans to challenge the decision in the Egyptian supreme court, Bertrand Deronchaine, a spokesman for the Paris- based company, said by telephone.
The Egyptian Financial Supervisory Authority has rejected three offers by France Telecom to acquire the remaining shares of Egyptian Co. for Mobile Services as too low, saying they were less than the price set by an arbitration ruling for the majority of the company. France Telecom offered 237 Egyptian pounds ($42.82) a share in its second bid on May 19, the regulator said in a statement today.
“We didn’t think that the regulator would go back on their decision,” said Marise Ananian, an analyst at Cairo-based EFG- Hermes Holding SAE, whose investment banking arm advises Orascom Telecom Holding SAE. “Giving one price to Orascom Telecom in the Mobinil Telecom consortium and offering another to minority shareholders of the Egyptian Co. for Mobile Services was unacceptable to the regulator and France Telecom didn’t provide any information to justify it.”
France Telecom has been in an ownership dispute over Egyptian Co. for Mobile Services, also known as Mobinil, with Orascom Telecom Holding SAE, the biggest mobile-phone operator in the Middle East.
France Telecom won an arbitration ruling this year requiring Orascom to sell its stake in Mobinil Telecom, a holding company that owns 51 percent of Egyptian Co. for Mobile Services. The Egyptian regulator says France Telecom should either make an offer based on the share price of the arbitration ruling or justify offering a lower price.
Mobinil fell as much 5.1 percent and closed 2.5 percent lower at 211.22 Egyptian pounds in Cairo, valuing the company at 21.1 billion pounds. Mobinil has advanced 44 percent this year.
“The decision has had a negative impact on Mobinil’s share price because it was going up on the hope that France Telecom would buy the shares at a high price,” Ananian said.