Egyptian mobile operator Mobinil's business would be helped by keeping a strong Egyptian partner, said the financial advisor to Orascom Telecom, which is in a dispute with France Telecom over their shareholdings in the firm.
Egypt's Orascom Telecom has said it would prefer to retain its stake in Mobinil after an arbitration court ordered the sale to France Telecom of OT's stake in a holding company that owns 51 percent of Mobinil to France Telecom.
"Generally a telecom operator should have technical expertise but also a strong, local flavour for national security reasons and other business reasons," Hassan Heikal, joint chief executive officer of investment bank EFG-Hermes, told the news agency Reuters on Tuesday.
EFG-Hermes is advising OT in its negotiations regarding Mobinil.
Heikal said it was better for Mobinil to have a "strong, local partner and contribution" and said OT provided that contribution in the past, including helping select local managers who understood the market when Mobinil was set up.
After the arbitration court ruling, the Egyptian market regulator Capital Markets Authority (CMA) said France Telecom would also have to make an obligatory tender for all remaining shares in Mobinil. FT has said any offer would be voluntary.
In Paris at the annual general shareholders meeting, France Telecom's head of international activities Jean-Yves Larrouturou said the firm was ready to fight a legal battle if necessary.
"On the Egyptian matter, we are in a phase of dialogue and we hope that it will come to fruition. If ever, to defend the interest of our company, we would need to go to a phase of contention, we are ready to do that," he said.
In addition to its stake in the holding company, OT holds another 20 percent of listed Mobinil shares.
Heikal said the French firm had said it would only need to pay $800 million to take control of Mobinil by buying shares in the holding company.
"They thought they would only have to pay $800 million for full control (of Mobinil), now we are talking about more than $3 billion, which does not make financial sense and is in contradiction to what they said before," Heikal said.
Trading in OT and Mobinil shares have been suspended since May 19. OT shares last traded at 35.71 Egyptian pounds on May 18, close to their year high.
Mobinil shares last traded at 199.53 pounds.