Orascom rejects France Telecom’s latest MobiNil offer; will appeal enforced sale

20 May 2009

According to the Financial Times, Egypt’s Orascom Telecom has rejected a new offer from France Telecom (FT) to acquire minority shareholder’s stakes in Egyptian Company for Mobile Services (MobiNil). The announcement comes only a day after Orascom revealed it was considering a renewed offer from the French company for the cellco. An arbitration court ruled in April 2009 that Orascom must sell its 28.75% stake in MobiNil Telecom, the majority shareholder in MobiNil, but Orascom claimed that under Egyptian law FT must offer to purchase its 20% direct stake in the mobile operator, as well as all other minority shareholdings. The dispute stems from the price set for these minority stakes, with Orascom claiming that it should be EGP272.36 (USD49) per share. Initially FT offered EGP200 per share, a price rejected by both Orascom and the Egyptian stock market regulator. It is understood that in this latest bid FT raised it obligatory tender offer for minority shareholders, and while Orascom has once more rebuffed the bid, it is thougt the stock market regulator may see the new valuation as fair.

In a final bid to retain its stake in the company Orascom has also announced that it has lodged an appeal with an Egyptian court to have the arbitration ruling overturned on the basis that FT missed the completion deadline for the transaction.