CAIRO: France Telecom (FT) and Orascom Telecom (OT) met on Dec. 16 to discuss the possibility of FT purchasing majority shares in Mobinil, after an Egyptian regulator approved FT’s offer of LE 245 ($44.57) per share.
By Thursday the results of the discussion between the telecom giants remained at a stalemate, with OT filing a grievance with the Egyptian Financial Supervisory Authority (EFSA) regarding their decision to approve FT’s tender offer for Mobinil.
OT stated that “the conditions for the sale of the shares owned by OT in Mobinil to FT and its affiliates, in accordance with the terms of the arbitration award and within the period specified in such award, have not been fulfilled. Accordingly, any public tender offer by FT or its affiliates is independent of any sale of OT’s shares in Mobinil.
According to OT, the EFSA’s decision to approve the offer from FT contradicts their previous rejections “without any legal or material factual bases.
The dispute between Orascom and France Telecom stems from an arbitration court ruling in March in favor of the French company. The Paris-based company holds a 71.25 percent stake in Mobinil. The court authorized it to acquire Orascom’s 28.75 percent stake in Mobinil.
Although Orascom looks to earn $1.6 billion from the sale, opposition to the transaction has been high among the Egyptian public since the deal was first suggested last year.
On Tuesday Naguib Sawiris, chairman of OT and founder of Mobinil, appeared on the Oribit TV’s “Al-Qahira Al-Youm saying that he would fight FT’s “hostile takeover of Mobinil.
The show’s host Amr Adib, typically known for lampooning Egyptian businessmen, supported Sawiris on the show.
By Wednesday morning several SMS messages began to circulate, asking for Mobinil users to switch mobile providers should the deal go through.
One such anonymous SMS read, in English: “Dear friends, Although I don’t know Naguib Sawiris personally but like many of you I am proud that he as ‘Egyptian’ is the pioneer of the telecom industry in Egypt, Middle East, and North Africa. After hearing him on TV, I won’t feel sorry and do nothing as we all usually (sic) do. Thus I decided to switch to another mobile operator if this transaction is implemented. Let’s try do something instead of…. Nothing. If u (sic) agree with me please forward.
A similar message, also in English, was sent by one of Sawiris’ personal assistants: “Dear friends: Following the recent hostile Mobinil takeover attempts by France Telecom I proudly support Naguib Sawiris who continues to be a visionary pioneer within the telecoms field. As a sign of my support I will gladly switch to another mobile operator if this transaction is implemented and Mobinil – founded and developed by Sawiris – ends up under FT control. Please join me in taking a stand and forward to your friends if you agree.
On Wednesday OT’s corporate communications office offered no update on the meeting’s proceedings, nor issued a statement regarding Mobinil customers’ decision to switch to other mobile providers in protest. A representative from the office clarified that Sawiris had not asked Mobinil subscribers to switch, and that if they chose to do so it was not at the urging of OT.
A Mobinil user who wishes to remain anonymous commented on why FT’s takeover attempt has rankled so many.
“Everyone is so heated up because no one is willing to see him [Sawiris] go down like this. If he loses Mobinil it might affect the economy.
Egypt’s telecom sector grew at 13.5 percent last year, contributing to Egypt GDP growth of 4.9 percent.
She continued, “Orascom is the biggest company in Egypt. The three Sawiris brothers [Samih, head of Orascom Hotels and Development; Nassef, head of Orascom Construction Industries; and Naguib, head of Orascom Telecom] represent us abroad. They have employed thousands.
“Also, now it’s personal, she went on. “People would rather be with Naguib. The Sawiris brothers are typically the main sponsors for major charity events. How can Naguib have companies in Algeria and Morocco but be kicked out of his home country? As Egyptians, we talk a lot but don’t act. It’s time to stand up and say something.
Finally, she called for the government to “do something. However, she acknowledged the possibility that Sawiris may have initiated the deal with FT, and might now be going back on his word. However, she continued, “it’s Mobinil, the Nile [nil] is our river.
Another Mobinil customer, who also wishes to remain anonymous, expressed bafflement at the furor: “Why would I switch? It’s just a company, it is the carrier that I use. I’m happy as long as long as the product is working.
He admitted that company takeovers are relatively unknown in Egypt, and that what would be “just business in the US or Europe becomes personal in Egypt.
“This is his [Sawiris’] baby, even though it’s a publicly owned company, deep down it’s still his. The reaction this is evoking is a nationalistic attitude that is getting us nowhere. It is time for Egypt to grow-up and join the world.
