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France Telecom's Egyptian Plan Blocked
(28 May 2009, BWCS Staff)France Telecom has had its takeover bid for the Egyptian mobile operator Mobinil rejected by the Egyptian stock market authority. The French operator, which has been trying to acquire all of Mobinil, said in a statement that it found the decision "highly questionable". France Telecom said the price it had offered was determined following talks with the market authorities themselves. In fact, its bid of EGP 237 a share represented a premium of 58% on the price of Mobinil's share prior to FT's interest in a majority stake becoming known.
The Paris-based giant has now retired to lick its wounds, but has vowed that in the future it will to use "all national and international legal channels" to challenge the current ruling. Earlier this year the French giant was heartened by an international arbitration court ruling that allowed it to buy Orascom Holding's stake in Mobinil Telecom which gave it a 51% stake in Egyptian Company for Mobile Services (ECMS), which operates under the brand Mobinil. While the French company earlier said it wanted to buy the rest of publicly traded ECMS, it failed to agree with Orascom and the regulator on the price.
Egypt's Capital Markets Authority today said in a statement on its Web site that the financial offer by France Telecom "upsets the principle of equal opportunities." The regulator said it was "not assured" by the reasons for the price set by France Telecom's Orange subsidiary. The CMA earlier ruled that France Telecom must bid for all of Egyptian Company for Mobile Services as part of its purchase of Mobinil Telecom shares.
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