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Egypt Rejects France Telecom Appeal
Published Aug 9, 2009
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France Telecom lost an appeal on Tuesday to overturn a ruling by Egypt's market regulator rejecting the French firm's bid for Mobinil shares.
The regulator has rejected three offers by France Telecom to buy all outstanding shares in Mobinil, which is at the centre of a row between the French firm and Mobinil's other main shareholder, Orascom Telecom (OT).
'Today it was a decision of a judicial committee, which has decided to reject the claim and approve the decision of the authority,' said Khaled Serry Seyam, the deputy chairman of the Capital Markets Authority.
The appeal related to the rejection of FT's second offer, in May.
The market regulator has since July 1 come under the broader umbrella of the Egyptian Financial Supervisory Authority, which published the decision on its website.
A France Telecom spokesman said the firm would make a further appeal against the committee's decision, and if this failed would seek international arbitration.
FT said it would not launch any further offers above 237 Egyptian pounds ($42.78) per share.
'The decision confirms that there is a real problem in Egypt concerning the respect for international law and also for stock exchange norms applied at the main financial centres,' the spokesman said.
OT and FT took their ownership dispute to an arbitration court in 2007, which ruled in April that FT should buy OT's stake in a holding company that owns 51 percent of Mobinil for 273 pounds per share.
OT and Egypt's regulator have said this decision compels FT to make a similar offer for the remaining shares, which FT disputes. OT also has a 20 percent direct stake in Mobinil.
Seyam at the CMA said the committee ruled that the original rejection was based on valid legal arguments. That ruling rejected the offer 'as it violated the principle of giving equal opportunity' to all shareholders.
Analysts say the long running dispute has kept Mobinil's share price elevated as investors bet on FT paying a hefty premium.
'FT appears keen to acquire Mobinil given the persistent flow of bids,' Naeem telecoms analyst Ahmed Adel wrote ahead of the decision, recommending Mobinil shareholders accept any offer over 220 pounds per share.
Posted by
VMD - [Virtual Marketing Department]
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