Orascom Telecom Jumps to 4-Year High on Buyout Flop: Cairo Mover

Orascom Telecom Holding SAE (ORTE) rose to the highest level in more than four years after a buyout offer, which the Egyptian mobile phone company said undervalued the shares, failed.

 The company that merged with VimpelCom Ltd. (VIP) in 2011 rose 5.7 percent to 4.83 Egyptian pounds ($0.69) the highest close in Cairo since September 2008. Altimo Holdings & Investments Ltd., VimpelCom’s biggest shareholder, had offered 70 cents a share to buy the 48 percent of Orascom not already owned by the Amsterdam-based phone company. Orascom was the biggest gainer on the benchmark EGX 30 Index, which advanced 1.7 percent.

 Russian billionaire Mikhail Fridman’s attempt to take control of Orascom ended yesterday after only 16 percent Orascom holders accepted the buyout offer, falling short of the 26 percent minimum Altimo set as a requirement. Orascom’s board told stockholders this month they should reject the buyout because it undervalued the company by as much as 36 percent, according to its adviser, HC Securities & Investments.

 “Altimo’s offer price now serves as a floor for the stock to catch up to,” Wafik Dawood, director of institutional sales at Cairo-based Mega Investments Securities, said by phone.

 Altimo said today it will seek the approval of Egypt’s regulator to proceed with the $585 million purchase of Orascom shares whose holders accepted the offer.

 “Investors run the risk of owning an illiquid stock if Altimo is able to go ahead with the purchase and take a third of Orascom’s free-float off the market,” Dawood said.

 About 1.8 million Orascom shares were traded in Cairo, or 45 percent of the three-month daily average. The global depositary receipts climbed 8.2 percent to $3.375 at 1:53 p.m. in London, set for the biggest increase in 11 months.

Bloomberg Businessweek