Russian fixed-line operator Comstar has announced that local mobile operator MTS’ voluntary tender offer will close at 1700EST on September 8 for GDR holders. This is before the September 21 closing date for all other Comstar shareholders.
Last month,…
Russian fixed-line operator Comstar has announced that local mobile operator MTS’ voluntary tender offer will close at 1700EST on September 8 for GDR holders. This is before the September 21 closing date for all other Comstar shareholders.
Last month, MTS proposed to buy out Comstar’s minority shareholders.
The company is offering 0.825 MTS ordinary shares for each Comstar ordinary share, representing a 7.7% premium to the three-month volume weighted average exchange ratio between MTS’ ordinary shares and Comstar’s GDR.
Shareholders who vote against, or do not vote on, the merger will have the right to sell their shares back to MTS and Comstar.
MTS’ board of directors has fixed the repurchase price at Rbs245.19 (?6.3) per MTS ordinary share, while Comstar’s board has set its repurchase price at Rbs212.85 (E5.5) per Comstar ordinary share.
The vote on the proposed merger is expected to take place at MTS and Comstar’s EGMs on December 23. To go ahead, it will need the approval of 75% of the shareholders present at each company’s EGM.
MTS will also launch a parallel voluntary tender offer (VTO) for up to 37,614,678 Comstar shares, representing 9% of the issued share capital of Comstar, at Rbs220 per Comstar ordinary share.
The VTO price per GDR is equivalent to US$7.16, which represents a 13.1% premium to the three month volume weighted average trading price of the Comstar GDR on the London Stock Exchange.
The merger is expected to complete in Q2 2011.
MTS is advised by Goldman Sachs and Latham&Watkins.
JPMorgan provided a fairness opinion to the Comstar Special Committee of Independent Board Directors, while Linklaters CIS is acting as legal adviser to Comstar.
Ernst & Young provided independent statutory appraisals to MTS and the Comstar Special Committee of Independent Board Directors for the purposes of each company’s assessment of the prices to be paid to shareholders who will sell back their shares. MTS currently owns 61.97% of Comstar (64.03% excluding treasury shares).
