Double-trouble for VTB as Vimpelcom, MTS join forces for new Tele2 bid

2 Apr 2013

Russian mobile giants Vimpelcom and Mobile TeleSystems (MTS) have announced that they have submitted a joint letter for the attention of Tele2 chairman Mike Parton and CEO Mats Granryd, expressing their interest in the acquisition of Tele2 Russia. The two companies have indicated that they would be prepared jointly to acquire 100% of Tele2 Russia for between USD4.0 billion-USD4.25 billion, including USD1.15 billion worth of net debt. This represents a premium of around 30% for Tele2 and its shareholders – relative to the equity value of the recently announced offer from Russia’s VTB Capital.

MTS CEO Andrei Dubovskov and Jo Lunder, his counterpart at Vimpelcom, wrote: ‘We would like to express our strong interest in providing an alternative offer to the shareholders of Tele2 and we think this is a distinctly more attractive proposal. We remain convinced that we can create vastly superior value for your shareholders and would be prepared to enter into discussions immediately with the aim of being able to conclude a transaction within a short timeframe and hence deliver the sort of transaction certainty we imagine Tele2 would be seeking. We believe that MTS and Vimpelcom demonstrate organisational strengths that combine well with the values of an organization like Tele2 and its shareholders. Both companies are publicly listed on the New York Stock Exchange (NYSE), which mandates the highest levels of information transparency and corporate governance standards … Neither MTS nor Vimpelcom were permitted to meet with Tele2 financial advisors or management to discuss the potential acquisition, which is why we have sent the letter to the Board of Directors and management of the company today’.

Russia, Mobile TeleSystems (MTS), Tele2, Tele2 Russia, VEON, VTB Mobile