Peace Breaks Out in Franco-Prussian mobile war

NEWS Gerhard Schmid has finally agreed to sell his stake in German mobile operator MobilCom, ending a long-running feud with France Telecom. Schmid, founder and chairman of MobilCom, will leave the company and sell his stake to a consortium of banks for E22 (£13.50) per share, in return for which France Telecom will abandon its legal action against him. France Telecom already owns 28.5 per cent of MobilCom, which gives is a presence in the important German market, but it is keen not to increase its stake beyond 30 per cent. If its holding grew larger than 30 per cent France Telecom would be obliged under German law to make an offer for all the remaining shares - something the cash-strapped company can scarcely afford. The French Government has been urging France Telecom to pull out of MobilCom, and abandon the German market, where six rival operators make it the most competitive in Europe. Schmid claims to have options which could force France Telecom subsidiary Orange to buy his stake, which would take the group over the 30 per cent threshold. The deal opens the way to a refinancing of MobilCom's E4.7bn (£2.9bn) of debt, which is due to be worked out in July. Jean-Louis Vinciguerra, chief financial officer at France Telecom, told the that the deal represented the "best solution" for resolving a long and complex dispute, which had threatened to descend into an orgy of damaging and expensive litigation.