Feb. 12 (Bloomberg) -- Orascom Telecom Holding SAE surged to the highest in almost two years, leading gains in Egypt’s telecommunications shares, on speculation France Telecom SA will raise its stake in Egyptian Co. for Mobile Services.
Shares of Orascom Telecom, whose parent company merged last year with Russia’s VimpelCom Ltd., jumped 6.8 percent to 4.26 Egyptian pounds at the 2:30 p.m. close in Cairo, the highest since April 2010. Telecom Egypt, the country’s monopoly fixed- line telephone company, advanced 4 percent to 15.48 pounds, the highest since September. The benchmark EGX 30 Index climbed 2.9 percent.
France Telecom is in talks to purchase part of billionaire Naguib Sawiris’s stake in their Egyptian mobile-phone venture, according to a person familiar with the situation. An acquisition of Mobinil by France Telecom at “favorable multiples” could reflect on others, especially Telecom Egypt, said Marise Ananian, a telecom analyst at Cairo-based EFG-Hermes Holding SAE.
“Investors are driving the whole sector up based on positive news that could be announced tomorrow,” she said.
Sawiris may keep a small interest in the company that controls Egyptian Co., known as Mobinil, while selling his stake in the operator itself to France Telecom, said the person, who declined to be identified because the talks are private.
Egypt’s stock exchange said today it has suspended shares of Mobinil and Orascom Telecom Media & Technology Holding SAE from trading until the latter releases the joint statement. Cairo-based Orascom Telecom Media, through which Sawiris owns his shares in Mobinil, said it will make a joint statement with France Telecom on the issue before trading starts on the Egyptian Exchange tomorrow.
All trades on Feb. 9 of both stocks were cancelled by the bourse. Mobinil and Orascom Telecom Media shares surged 58 percent and 46 percent, respectively, between Jan. 22 and Feb. 8 on speculation of a possible deal with France Telecom, which owns about 71 percent of Mobinil’s parent company.
Mobinil has a market value of about $2.3 billion, bigger than its main competitor, the local unit of Vodafone Group Plc. It was the subject of an ownership dispute between Sawiris and France Telecom Chief Executive Officer Stephane Richard’s predecessor, Didier Lombard, that was settled shortly after Richard took over in 2010.
The April 2010 settlement included a put option, or a contract that gives Sawiris the option to sell his stake in Mobinil to France Telecom by Nov. 15, 2013 at a price that would increase over time from 221.7 pounds to 248.5 pounds per share at the end of 2013.
--Editor: Daliah Merzaban, Shanthy Nambiar
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