Vimpelcom ready with Golden offer?

27 Nov 2007

Russia’s second largest cellular operator, Vimpelcom, is rumoured to have made a USD100 per share takeover offer for wireline carrier Golden Telecom. A report from Reuters, which cites ‘a source familiar with the talks’, says Vimpelcom is unlikely to raise its offer above USD100 per share. The proposed deal values Golden Telecom at USD4.03 billion, which is equivalent to 50% of Vimpelcom’s net assets, and under Russian law this means that the deal can be approved by the board and does not require a shareholder vote. Going over this price threshold would lead to a much more drawn-out sale process and this is not acceptable to Vimpelcom, the source says. Golden Telecom’s two largest shareholders, the Alfa Group and Telenor, are also the two main backers of Vimpelcom.

Vimpelcom is not the only Russian cellco looking at strengthening ties with a wireline operator; its larger rival Mobile TeleSystems (MTS) is part of the AFK Sistema group which is also the main shareholder in wireline operator Comstar UTS. Sistema has in the past hinted that it might one day merge its wireless and wireline assets to create a Russian super-carrier.

Russia, Beeline (Russia), VEON