France Telecom has ruled out making a higher bid for the minority shares in ECMS, Egypt’s largest mobile operator, creating an impasse with rival shareholder Orascom, which could see the dispute escalate into a prolonged legal battle. Egypt’s Capital Market Authority (CMA) has rejected two offers by France Telecom to buy-out the 49 percent minority shareholders (20 percent Orascom and 29 percent free float) in the firm. France Telecom’s deputy chief executive Jean-Yves Larrouturou told the Financial Times today that the company’s most recent offer of EGP237 per share was likely to be its last. “It is the highest possible level from my point of view… I don’t have any intention to increase this level.” Meanwhile, Orascom chairman Naguib Sawiris has set the sale price for its minority shareholding at EGP273 per share and appears to be reluctant to lower it. Larrouturou added that France Telecom was preparing for a legal battle that could last five years.

France Telecom already owns 71.25 percent of the holding company (known as Mobinil) that controls 51 percent of ECMS, and is in the process of buying-out Orascom’s separate 28.75 percent share in the holding company for EGP273.26 per share, a price set by an arbitration court in April. However, France Telecom has argued that its purchase of the minority ECMS shareholders is not covered by the arbitration court ruling, an argument rejected by Orascom and, it seems, by the Egyptian regulator. In other news, India’s Economic Times notes that France Telecom and Australia’s Telstra are in talks with Malaysia’s Maxis Communications to buy a minority stake in Maxis’ Indian operator, Aircel. Sources say France Telecom is looking to buy a 20-25 percent stake in Aircel, valued at around US$1.4 billion to US$2 billion.