WellCOM saga has a Tele2-shaped twist in the tale

6 Sep 2005

Swedish pan-European mobile group Tele2 has made a bid of USD250 million for Ukrainian Radio Systems, the east European cellco that has been the subject of a long-running takeover bid by Russia’s Vimpelcom, and the cause of a major falling out between that company’s shareholders. According to Russian daily Kommersant, Tele2 wants to purchase the cellco, which operates under the brand WellCOM, outright and has offered around USD50 million more than Vimpelcom had hoped to pay for a 50% stake. Tele2 has yet to comment.

Any bid by Tele2 would prove to be an intriguing twist in the WellCOM tale. Vimpelcom shareholders Telenor and Alfa have been at loggerheads ever since the latter tried to push through a USD200 million purchase of WellCOM last year, claiming that the cellco possesses plenty of growth potential in a rapidly expanding market. But Telenor is fiercely opposed to the purchase and the pair have been embroiled in a vicious battle for control of Vimpelcom since the early part of this year, which has now spilled into the law courts. Telenor and Alfa already share ownership of one of the Ukraine’s biggest mobile operators, Kyivstar, and the Norwegian company says a potentially costly raid for the far smaller WellCOM has ‘no business merit’; the cellco has a market share of less than 0.5%.