An Egyptian court has dealt a blow to France Telecom’s Middle East expansion plans, upholding an earlier ruling that had blocked its bid for Mobinil, Egypt’s largest mobile operator.
The court ruled Saturday that minority shareholders would be disadvantaged by FT’s offer of 245 Egyptian pounds ($44.40) per share for the Mobinil shares it did not own, Reuters reported.
The offer was 28 pounds lower than the price set a year in arbitration ruling between FT and its Egyptian partner Orascom. FT owns 71.25% of Egyptian Company for Mobile Services (ECMS) – which trades under the Mobinil brand - and Orascom the remainder.
Orascom lawyer Osman Mowafi hailed the decision as a “big victory” for the operator. FT officials declined to comment.
The two parties have 60 days to appeal. The Egyptian Financial Supervisory Authority is also considering an appeal against the decision.
Orascom’s CEO Khaled Birchara says the firm would fight any decision that allowed Orange to increase its stake.
France Telecom’s new CEO Stephane Richard hopes to double revenues from emerging markets in the next five years, by investing up to €7 billion ($9.4b) in Africa and the Middle East.
Gaining control of Egypt’s largest mobile operator is a key part of Richard’s plan.
Mobinil had 25.34 million subscribers at end 2009 and recorded net income of EGP2 billion ($362m) during the year.