Orascom appeals France Tel's Mobinil buyout plan

Egypt's Orascom Telecom has asked the regulator to reverse its backing for France Telecom's buyout offer for Mobinil, ownership of which the two companies have been disputing for years.

France Telecom and Orascom Telecom, the two main shareholders in Mobinil, Egypt's largest mobile operator by subscribers, took their battle for control of the company to an arbitration court in 2007, which ruled this year that the French company should buy Orascom's stake.

Egypt's regulator rejected three offers from the France Telecom group to buy other freely traded stock, but finally agreed last week to the latest offer of 245 Egyptian pounds ($44.90) for each outstanding Mobinil share.

The arbitration court in April had said France Telecom should buy Orascom's stake in their holding company, which owns 51 per cent of Mobinil, for about 273 pounds for each holding company share, but that deal was not finalised due to disagreement over the implications for the other shares.

The regulator had rejected the other French offers as too low but on Thursday said it agreed with France Telecom's argument that shares in the holding company were worth more because it had received dividends it had not distributed and charged management fees.

Executives from both companies met on Wednesday to discuss the ownership row, and Orascom issued an appeal later in the day saying the price differential was based on false assumptions.

"(Orascom Telecom) has requested the annulment of the authority's decision because it is not made in accordance with the law and contradicts the principles of equality and equal opportunity between the shareholders," Orascom said in its statement.

It said it would take legal action to protect ots rights.