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French telecom company fails to remove Orange Belgium from stock exchange

The French telecoms company’s attempt to take Orange Belgium (formerly Mobistar) off the stock market was unsuccessful, with Orange France acquiring 23.94% of the shares, leaving them with just under 77% in total.

“And that’s where we stop,” Tom Wright, spokesman for Orange, told De Standaard. “We’re turning the page, and now we’re focusing on strategy.”

The battle over Orange Belgium has been raging for some time.

In December, Orange France— which was then already the majority shareholder in Orange Belgium with 53%— launched a takeover bid offering €22 per share.

While it may have seemed reasonable compared to the €16 price at the time, it was quickly labelled “opportunistic” by analysts because it was below the adjusted price of €23.46 at the time of the initial public offering in 1998.

Existing shareholders, including the British investment fund Polygon (which owns 5.29% of the shares), resisted and demanded a higher price, which Paris was unwilling to offer.

Both parties engaged investment banks to defend their respective points, and while the bid was eventually extended, it wasn’t raised.

Orange doesn’t want the ordeal to be considered a flop.

“We had a tax benefit last year that we wanted to use to increase our stake in Orange Belgium,” Wright said.

“We did that with this one. One hundred percent would have been nice, but we knew that would be difficult. It was no more than nice to have.”

Stock market watchers see it differently.

“This is a flop, full stop,” Tom Simonts, Senior Financial Economist at KBC Bank told De Standaard.

“If Orange wanted to simply increase its stake, it could have made a partial bid for, say, 20% of the shares. It did not do so. They tried, and failed.”

What Orange France did succeed in was buying a larger stake in Orange Belgium. With 77% ownership, they are firmly in control of their Brussels arm.

Simonts wonders whether Paris will put Orange Belgium in a better position to invest heavily in expensive 5G networks in the coming years.

“They are strategic investors, or at least I hope so,” said Simonts. “They now have a share that, because of the takeover bid, is priced higher than its peers, in a sector where a lot is happening.” The Brussels Times

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