Egypt News

The report followed the French firm's announcement it had secured commitments to buy an additional 3 percent of Mobinil , the latest twist in a row over ownership with Orascom Telecom , the other main Mobinil shareholder.

"The law does not allow France Telecom to buy more than 2 percent of the shares of ... Mobinil from the free market," the independent Al Masry Al Youm daily quoted a "prominent official" at the regulator as saying.

The source said the regulator, the Capital Market Authority (CMA), had received an official letter from France Telecom on Monday saying it had commitments from shareholders to let it buy the extra shares.
The source said the law would only allow France Telecom to buy 2 percent a year without prior clearance.

The  Capital Market Authority could not be reached for comment. A Mobinil spokeswoman said the firm had no comment on issues relating to the regulatory authority.

France Telecom previously said any deal to buy extra shares would need the regulator's approval. A spokesman for the French firm in Paris said France Telecom hoped for a prompt ruling.

He said it was up to the Capital Market Authority to decide, "either approving the deal or rejecting it, provided a rejection is motivated in the framework of Egyptian market regulations".

"We are waiting for a decision from the Capital Market Authority and hope it will come soon in the interest of the shareholders who have offered us their shares and (in the interest) of the good functioning of the markets."

Mobinil is 51 percent owned by a holding company in which France Telecom has a 71.25 percent stake and Orascom has 28.75 percent. In addition, Orascom holds a 20 percent direct stake.

That structure gives Orascom an overall stake of about 35 percent and France Telecom about 36 percent, analysts say. The remaining 29 percent of the group is traded on the Egyptian stock exchange .

Mobinil shares gained 0.23 percent to 217 pounds by 1020 GMT, and Orascom Telecom shares added 0.64 percent to 35.90 pounds. Paris-traded France Telecom shares trimmed 0.5 percent to 16.66 euros ($23.72).

"From a more fundamental point of view Mobinil is expensive at these prices, but it has been able to sustain momentum due to a lot of speculation about the deal over the past few weeks," said Delilah Heakal, telecom analyst at Cairo's Pharos Holding.

Orascom and France Telecom have been at loggerheads over the price the French firm should pay for the outstanding shares since an arbitration court ruled on April 5 that the French firm should buy Orascom's stake in the holding company at a price equivalent to 273.26 Egyptian pounds, $49 per share at the time.

Oracom and the Capital Market Authority both said this decision obliged France Telecom to offer for the entire company at an equivalent price, while France Telecom has said any offer would be voluntary.
France Telecom said it had commitments to buy 3 percent of Mobinil at a price of 230 Egyptian pounds ($41) per share.

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