France Telecom has signed a non-binding memorandum of understanding to acquire Orascom Telecom’s stake in Egyptian mobile operator ECMS, the holding company for Mobinil.
France Telecom, which currently owns 71.25% of Mobinil, will acquire the additional stake for at a price of EGP 202.5 ($33.5) per Mobinil share. Orascom Telecom will retain a 5% stake in Mobinil.
France Telecom will then launch a tender offer for Mobinil’s free float, subject to the approval of the Egyptian Financial Supervisory Authority.
Orascom Telecom will retain similar voting rights and board representation in Mobinil as it currently has, and will remain as France Telecom’s “strategic local partner in Egypt” to provide strategic and management oversight over Mobinil, the two telcos said in a joint statement.
The ownership of Mobinil been subject of a protracted dispute between France Telecom and Orascom Telecom. The French operator has been keen to take a controlling stake in the company since at least 2010, when it made a bid to purchase outstanding shares in Mobinil. That bid was thwarted by an Egyptian court, which blocked the deal.