MTS, Vimpelcom, Alfa make rival offers for Tele2 Russia

News Wireless Russian Federation 28 MAR 2013
MTS, Vimpelcom, Alfa make rival offers for Tele2 Russia
Russian mobile operators MTS and VimpelCom announced that they have submitted a joint letter to Tele2 chairman Mike Parton and CEO Mats Granryd, expressing their interest in the acquisition of Tele2 Russia. In the letter, MTS and Vimpelcom indicate they would be prepared jointly to acquire 100 percent of Tele2 Russia for USD 4.0-4.25 billion, including USD 1.15 billion of net debt. 

This represents a premium of up to 30 percent for Tele2 and its shareholders relative to the equity value of the recently announced offer from Russian bank VTB. VTB agreed to pay USD 2.4 billion for Tele2 Russia's equity as well as assume USD 1.15 billion in debt at the company. VTB said it would look for financial and strategic partners for Tele2 Russia after completing the takeover.  

Vimpelcom's shareholder Alfa also said it was ready to make an offer for Tele2 Russia. Alfa subsidiary A1 said it met with Tele2 management and the Swedish company's main shareholder Kinnevik in 2012 and made an offer "significantly higher" than VTB's for Tele2 Russia. This was rejected in October by Tele2's adviser Morgan Stanley. A1 said it is still prepared to pay USD 3.6-4.0 billion cash, with no debt financing, for the Russian mobile operator. It approached Tele2 in early March again, but received no response. 

A1 said it was also interested in Tele2's other assets. It would like to enter negotiations on price in order to agree a deal "over a very short period of time". It said the VTB deal to buy Tele2 Russia undervalues the company and is not in the best interests of Tele2 and Kinnevik minority shareholders. 

Categories:

Mobile

Companies:

Tele2,  MTS,  Tele2 Russia,  Vimpelcom

Countries:

Russian Federation

Tags:

M&A buyouts & divestments

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