France Telecom and Naguib Sawiris’ Orascom Telecom Media (OTMT) have agreed on the transaction details for the sale of Mobinil, also known as Egyptian Company for Mobile Services (ECMS), and on a mandatory tender offer for the 29% of ECMS shares in…
France Telecom and Naguib Sawiris’ Orascom Telecom Media (OTMT) have agreed on the transaction details for the sale of Mobinil, also known as Egyptian Company for Mobile Services (ECMS), and on a mandatory tender offer for the 29% of ECMS shares in free float.
As expected, FT offers to pay E£202.5 (US$33.55) per ECMS share, valuing the deal at €1.5bn (US$2bn).
Under the agreement, OTMT will sell 15% of its direct stake in ECMS to FT, and retain a 5% direct stake.
OTMT directly controls 20% of ECMS and indirectly holds another 14.67% via a holding company. FT indirectly owns 36.33% of ECMS, while the remaining 29% is in free float.
OTMT will receive around E£6bn (US$994m) for its combined direct and indirect interest in ECMS.
Upon completion of the transaction, OTMT will continue to be involved in ECMS as FT’s strategic partner in the new joint holding company, MT Telecom, which will replace the existing holding company.
Under the new structure, OTMT will appoint three of ECMS’ 13 members of the board of directors, while FT will appoint seven board members.
OTMT will also continue to be involved in the management of the company, including the appointment of the CEO.
FT and OTMT said in a statement that they have agreed to a revised set of put and call options extending to 2017 regarding OTMT’s remaining stakes in ECMS and MT Telecom.
OTMT has also agreed to grant FT a right of first refusal in any sale of its stake in ECMS.
Commenting on the agreement, FT chairman Stephane Richard said: “We believe our €1.5bn investment demonstrates our continued strong commitment and belief in ECMS’ potential and the Egyptian economy in general”.
He added that, provided conditions allow it, FT intends to ensure up to 15% of ECMS shares are held by Egyptian citizens and/or companies.
