Court thwarts France Telecom’s bid for Mobinil
Victory for Orascom as Egyptian court upholds decision to block France Telecom's bid to gain control of Mobinil.
France Telecom's bid to purchase outstanding shares in Mobinil has been blocked by an Egyptian court, thwarting the operator's ambition to take a controlling stake in the Egyptian mobile operator that it jointly owns with Orascom Telecom.
The decision of the Egyptian court was the latest development in a protracted disagreement between feuding operators France Telecom and Orascom Telecom, which are joint owners of Egyptian Company for Mobile Services (ECMS), the holding company for Mobinil. Orascom also holds an additional 20% stake in Mobinil directly.
The court's decision upheld an earlier ruling from December 2009, which worked in Orascom Telecom's favour by blocking a share offer that would have allowed France Telecom to take control of Mobinil for $2.9 billion.
Orascom Telecom argued at the time that France Telecom should have offered EGP273 ($49.5) per share for the outstanding shares in Mobinil, rather than its actual offer of EGP245 per share.
The development was a welcome victory for Orascom, which suffered a setback in Algeria at the end of last month when Algerian tax authorities rejected an appeal by the operator against a tax reassessment that resulted in a demand for $596.6 million in penalties and back taxes, according to the UK broadsheet, Financial Times.
However, the court's decision marks a setback for France Telecom, which last week stated its intention to invest heavily in the Middle East and Africa. The company's CEO, Stéphane Richard, told the FT that his company could spend up to $9.3 billion on acquisitions in Africa and the Middle East "under a five-year drive to double revenues from emerging markets."