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Egypt regulator blocks France Tel’s Mobinil bid
CAIRO - Egypt’s Capital Market Authority on Tuesday blocked a tender offer submitted by France Telecom to buy up Mobinil, the country’s largest cell phone provider by number of subscribers, in a ruling that could scuttle the deal.
The CMA said that the tender offer submitted by France Telecom to acquire the 28.75 percent stake held by Egyptian telecom giant Orascom Telecom in Mobinil Telecom was far short of what was fair for minority shareholders.
FT already holds an 81.75 percent stake in Mobinil Telecom, which itself has a 51 percent stake of the Egyptian Company for Mobile Services - Mobinil’s operator.
In a statement released Tuesday, France Telecom said it ¢regrets” that the CMA rejected its proposal.
¢In the current circumstances, France Telecom considers it is not obliged by law or by market practice to launch a mandatory buyout offer,” FT said. Orascom had no immediate comment on FT’s statements.
The CMA’s ruling came two days after Orascom and France Telecom said that an arbitration court had sided with FT in a 2007 dispute, and Orascom Telecom was now required to sell its minority share in Mobinil Telecom.
The CMA said that the tender offer submitted by FT was ¢far removed” from the share price cited by the arbitration court. As a result, ¢the authority has decided to reject the mandatory tender offer because it conflicts with the principles of equality” among shareholders, the CMA said in a statement.
The Egyptian regulators’ decision appeared to support comments by Orascom’s chief executive, who told The Associated Press late Monday that FT was required under Egyptian law to launch a 100 percent mandatory tender offer. That would, by extension, include not only OT’s stake in Mobinil Telecom, but also the other 49 percent stake in ECMS which is divided into a 20 percent direct equity stake for Orascom and 29 percent in free float shares.
FT had said the deal - based on its initial proposal to buy up OT’s stake in Mobinil Telecom - would bring in about Ð530 million ($717 million) based on a per share price of 441.66 Egyptian pounds ($78.53).
But Orascom said the deal was valued at $1.7 billion - or 273.26 Egyptian pounds ($48.59) per share - implying that FT had to also purchase OT’s direct equity stake in ECMS and the free float shares. That price is about 62 percent higher than its current level Tuesday.
Orascom, in a statement Tuesday, said it expects to use the funds from the sale for its expansion efforts.
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