The Egyptian stock market authority has rejected France Telecom's bid to acquire all of mobile operator Mobinil. In a statement, France Telecom said it found the ruling "highly questionable", given that the price of its offer was determined following talks with the market authorities themselves.
The company had bid EGP 237 per share, a 58 percent premium on the share price prior to a court ruling giving FT the chance at majority control of Mobinil. The French operator said it is abandoning the bid for now, but it will use "all national and international legal channels" to challenge the securities regulator's ruling.
An international arbitration court ruled earlier this year that Orascom Telecom sell its stake in the Mobinil holding company to France Telecom. This will give France Telecom 100 percent ownership of the Mobinil company, which owns 51 percent of ECMS, the mobile operator that offers its services under the Mobinil brand.
The Egyptian Capital Markets Authority subsequently told FT to launch a public offer for the remaining shares in ECMS, in which Orascom holds another 20 percent. FT said that as the arbitration ruling was not challenged within the required legal deadlines, it is consequently "executable in its form and substance" as confirmed on 7 May by the District Court of Geneva, the same jurisdictional district as the Arbitration Court.
As France Telecom did not receive the Mobinil securities currently owned by Orascom Telecom by 10 April in accordance with the ruling, Orascom Telecom must pay FT a fine of USD 50,000 per day until the transfer. FT said it had tried to negotiate with Orascom Telecom, but these discussions have led "only to unilateral declarations by Orascom Telecom that bear no relation to the legal and financial facts as they stand and that have caused confusion in the market and the public opinion".