CAIRO (AP) – Egypt’s Orascom Telecom on Friday objected to a decision by an Egyptian regulator opening the door for France Telecom to buy its shares in mobile phone giant Mobinil, the latest wrinkle in a potential deal that has hit repeated obstacles.
But the Egyptian telecom giant stopped short of saying what it would do, noting only that it would study the legal issues and later announce its next step.
France Telecom said on Thursday that subsidiary Orange Participations had been granted approval by the Egyptian Financial Supervisory Authority to buy out all shares of Mobinil subsidiary Egyptian Company for Mobile Services at a price of 245 Egyptian pounds ($45.4) per share.
Orascom said it was “surprised and puzzled” by the regulator’s decision, arguing in an e-mailed statement that it “contradicts three previous decisions issued by the same authority on the same matter.”
France Telecom had said the approval paves the way for its purchase of Mobinil, Egypt’s largest mobile phone company by subscribers.
The dispute between Orascom and France Telecom stems from an arbitration court ruling in March in favor of the French company. The Paris-based company holds a 71.25 percent stake in Mobinil. The court authorized it to acquire Orascom’s 28.75 percent stake in Mobinil.
Orascom had argued that the court’s ruling for an obligatory purchase offer meant that France Telecom must pay all shareholders the same price, a stand Egyptian regulators had backed on several occasions by blocking the sale.
“Accepting a price per share that is less than the price set by the financial regulatory authority … is considered a blatant violation” of the market authority’s laws, Orascom said in the statement.
Under Mobinil’s complicated ownership structure, France Telecom and Orascom share ownership in the company, which itself holds a 51 percent stake in Egyptian Company for Mobile Services. Orascom also holds a 20 percent stake in ECMS, while the remaining 29 percent is held by other shareholders.
France Telecom said the new offer represented an almost 19 percent premium over Mobinil’s share price Thursday and over 63 percent more than the share price when the arbitration ruling was announced on April 5. Orascom has operations in Algeria, Pakistan, Bangladesh, Tunisia, Zimbabwe and North Korea.