11/12/2009 By SHEREEN EL GAZZAR ( Source: http://online.wsj.com )

Orascom Telecom Opposes Regulator Decision On Mobinil

Orascom Telecom Holding said Friday it objects to the Egyptian regulator's approval of the sale of Egyptian Co. for Mobile Services, or Mobinil, to a unit of France Telecom SA.

France Telecom and Orascom Telecom are Mobinil's two largest shareholders. They have been in a months-long dispute about their stakes in Mobinil, Egypt's largest mobile phone company by subscribers.

In a statement, Orascom said it would study all the legal procedures regarding these developments and announce its final decision and plan of action later. France Telecom's Orange Participations unit offered 245 Egyptian pounds ($44.42) for each freely traded share in Mobinil, the Financial Supervisory Authority said in a statement on its Web site.

France Telecom's unit has previously made three offers to buy Mobinil shares but all were rejected by the Egyptian regulator.

In April, the Paris-based company won an arbitration ruling requiring that Mobinil shareholder Orascom Telecom sell its stake in a joint holding firm for about 273 Egyptian pounds a share.

EFSA had previously rejected France Telecom's three offers, saying France Telecom should either buy the Mobinil shares at the court price of 273.26 Egyptian pounds a share or justify giving a lower price.

"OT objects to the Egyptian Financial Supervisory Authority, or EFSA, decision regarding the mandatory offer price to given by a France Telecom's unit," said Orascom Telecom, adding that the decision contradicts the previous three decisions.

CI Capital said in a note late Thursday that Orascom Telecom could respond by either selling all its shares of Mobinil and the holding company to France Telecom, retaining its shares, or objecting to the offer and challenging it through court or another arbitration round.

The bank said Orascom Telecom would likely prefer to object to the offer and seek to challenge it, and unlikely to sell its shares.