Russian mobile operator MegaFon has decided to cancel the company's listing of GDRs on the London Stock Exchange (LSE). The board has also approved a buy-back programme of the company's ordinary shares and GDRs in free float that could result in the delisting of Megafon from the stock market. The board said that remaining a public company is not a strategic priority for the company.
The buy-back programme will be carried out by the Cyprus-based MegaFon Investments Limited (MICL), a wholly-owned subsidiary of Megafon, by way of a tender offer to purchase for cash up to 128.95 million of the outstanding ordinary shares and GDRs, representing 20.8 percent of the company’s shares. The purchase price will be USD 9.75 for each ordinary share and for each GDR, compared to a closing price on 13 July of USD 9.00 per share.
The tender offer will commence on 16 July and is expected to expire on 22 August and will be made to all holders of ordinary shares and GDRs, other than those held by Megafon's largest shareholder USM Holdings and Gazprombank Group. The shares will be cancelled after repurchase.
Under the current shareholder structure, USM holds 56.32 percent of Megacon, Gazprombank has 18.79 percent and MICL owns 3.92 percent. A total of 20.97 percent of shares are publicly traded.
MegaFon said it may also review whether or not to maintain the GDR programme following the cancellation of the listing, taking into consideration, among other things the amount of GDRs still outstanding. MegaFon will re-visit the question of delisting its ordinary shares from the Moscow Exchange following completion of the tender offer.
