LONDON: UBS downgraded Mobinil to "neutral" from "buy" citing fears of a potential delay in a deal by France Telecom to buy Egyptian tycoon Naguib Sawiris’ stake in the country’s largest mobile phone operator.
On Feb. 13, France Telecom said it had reached a preliminary accord to buy out most of Sawiris’ stake in Mobinil for LE 202.5 per share.
Potential fears that the deal may be delayed, or even blocked, can pose significant downside risk to Mobinil’s stock, UBS analyst Alex Wright wrote in a note to clients.
The French group is likely to make a tender offer to minority shareholders at the same price. However, the stock is trading at a 14 percent discount to the potential tender price, the analyst said.
The analyst added that he was raising his 2012 loss estimate for Mobinil as it had reported weak fourth-quarter results.
France Telecom was already the biggest shareholder in Mobinil, and Egypt is a key part of its effort to expand in high-growth emerging markets in Africa and the Middle East.
Shares of Mobinil were trading down 2 percent at LE 171 on Tuesday morning on the Cairo Stock Exchange.
