PARIS — France Telecom has reached a preliminary accord to buy out most of Egyptian tycoon Naguib Sawiris’ stake in their jointly owned telecom operator Mobinil, according to a statement on Monday.
The French group will then make a tender offer to the minority shareholders of the listed portion of Mobinil, known as ECMS, for LE202.50 per share, the same price offered to Sawiris.
Afterward, France Telecom would end up owning 95 percent of Egypt’s largest mobile operator if all the minority shareholders were to accept, while Sawiris would keep 5 percent.
The agreement is subject to approval by Egypt’s stock market regulator.
France Telecom’s offer represents a 61 percent premium over the last ECMS price of LE126.06 before the deal was announced.
Mobinil, which is Egypt’s largest telecom company, was the subject of a drawn-own legal fight between Sawiris and France Telecom several years ago that ended in April 2010 with a new shareholders’ agreement.
Under the terms of that agreement, Sawiris had a put option to sell his ECMS stake to France Telecom beginning in September 2012 for between LE221.70 and LE248.50 per share, depending on the timing.
The two sides were in talks over the put option in recent days because it ascribes a much higher value than Mobinil’s current market valuation, which has shriveled after Egypt’s revolution paralyzed much of the economy.
For France Telecom, the Egyptian operator is part of an ongoing effort to expand its footprint in high-growth emerging markets to offset tough competition in its home market.
Sawiris sold most of his telecom assets last year to Russia’s Vimpelcom in a US$6 billion deal, but his Mobinil stake was not included.
