Egypt Rejects France Telecom Bid For Mobinil

But the company had previously rejected the penalty claim, saying FT was at fault because it refused to submit payment for the shares before they were to be handed over.

France Telecom said the offer it submitted was based on a share price of 237 pounds, or a 58 percent premium to the April 5 closing price — the last before the International Chamber of Commerce arbitration ruling.

In rejecting the latest offer, the CMA said it was not "assured" by the argument and supporting documentation submitted by Orange.

The CMA also said that given its rejection of the offer, it was lifting its halt on trading on Mobinil's shares, which were suspended since May 19 while the regulatory body studied Orange's proposal.

Mobinil's stock was down roughly 7.3 percent — to 190 pounds — by Wednesday afternoon on the Egyptian stock exchange, and analysts said a further slide was likely.

"Something fundamentally has changed on how investors perceive Mobinil," said Shrouk Diab, a telecom analyst with Beltone Financial, a Cairo-based Mideast investment bank. "It could weaken in price, but probably not to the level before the tender offer. It rallied based on the price of 273, and everyone expected it would be sold at this price. "