France Telecom stopped from acquiring largest Egyptian operator

The Egyptian stock market regulator has thwarted an attempt by France Telecom (FT) to gain control of the country's largest mobile operator, claiming the French telco bid below a price mandated by the Egyptian court, and  undervalued the company. France Telecom has commented it now has no intention of making a new offer for the Egyptian Company for Mobile Services (ECMS), which operates under the Mobinil brand.

However, FT will continue to have a large say in ECMS/Mobinil following a recent decision by an Egyptian arbitration panel ruling in FT's favour which will force Orascom--which had a near 30 per cent shareholding in Mobinil--to sell this stake to FT. Mobinil has a 51 per cent holding in ECMS which will now be sold to FT for approximately US$1.7 billion.

This sale will effectively mean FT has a 51 per cent shareholding in ECMS, a level it claims it is "very comfortable with."

This tangle of ownership remains complex given a shareholding in Mobinil that will remain under the control of Orascom and may again lead to the lawyers becoming involved. FT and Orascom went to court in 2007 over a dispute about their joint shareholding in ECMS, although the specifics of the disagreement have not been made public.

For more on this story:
Telegeography, Total Telecom and Computer Business Review

Related stories:
France Telecom on the prowl after TeliaSonera debacle
Investment in emerging markets a must, warns Egyptian operator
France Telecom profit falls 35 percent
French gov't to retain France Telecom stake