Syvazinvest suspends Akado takeover talks, MegaFon wait in the wings

23 Sep 2010

Russian state-owned telecommunications holding company Svyazinvest has suspended talks to buy broadband and cable provider Akado, according to reports in Vedomosti. Citing a source familiar with the situation, Vedomosti suggests that the talks will be resurrected as soon as recently-resigned chairman Yevgeny Yurchenko has been replaced. It is thought that one of the reasons for his resignation was a disagreement over the mooted USD1.2 billion purchase price for Akado.

The dispute arose when Yurchenko criticised that fact that only Konstantin Malofeyev, founder of Marshall Capital Partners and member of Svyazinvest’s board of directors, and Alexander Provotorov, formerly a Marshall Capital employee and now president of Rostelecom, participated in negotiations, whilst the management of Svyazinvest and its subsidiary CenterTelecom – which would have been the actual buyer of Akado – were not invited to participate. Yurchenko’s vocal complaint about the way the acquisition has been handled have ensured that CenterTelecom has now lost its exclusive rights to lead acquisition talks. Akado shareholders have now suspended the due diligence procedure and blocked CenterTelecom’s access to Akado’s documents until Svyazinvest resolves its internal dispute. The unnamed source asserts that Russian cellco MegaFon is monitoring developments with interest, and is keen to lodge a rival bid if the mooted acquisition falls apart.

Russia, AKADO Telecom, Center Telecom, Svyazinvest