France Telecom-Orange today said it is in “advanced” discussions with Orascom Telecom Media and Technology over the ownership of Egyptian operator MobiNil.

The companies have signed a non-binding deal, which proposes that FT-Orange would acquire “most” of OTMT’s holding in Egyptian Company for Mobile Services (ECMS) and MobiNil, before launching a tender offer at the same price for the stock which is currently in free float. OTMT would retain a 5 percent economic interest, with the MobiNil shareholders’ agreement amended to protect minority shareholders’ interest.

Depending on shareholder uptake of the offer, France Telecom could end up owning up to 95 percent of the Egyptian operator.
In a statement, France Telecom said that OTMT would retain “similar voting rights and board representation” as currently in place, and would remain its “strategic local partner” in the country, providing strategic and management oversight over ECMS.

According to Wireless Intelligence data, MobiNil is currently the second largest operator in Egypt, with a 39 percent market share, behind Vodafone Egypt, which as a 44 percent share.

France Telecom was previously involved in an ownership dispute with Orascom over the Egyptian assets, which was settled in April 2010. It is believed that at this time the provision was put in place for Orascom to sell its holding to the French incumbent.

Under the current structure, France Telecom owns 71.25 percent of a holding company called MobiNil, alongside OTMT, which holds the remaining 28.75 percent. In turn, MobiNil owns 51 percent of ECMS, with OTMT also having an additional direct stake of 20 percent, and the remaining 29 percent in free float. ECMS trades using the MobiNil brand.

France Telecom is proposing to pay EGP202.5 per ECMS share, which Bloomberg said is 62 percent higher than the closing price on 8 February 2012.

The transactions are subject to final agreement and the approval of the companies’ boards, as well as regulatory authorities.