Russian mobile operator MegaFon is expected to announce shortly that the order book for its upcoming IPO in London has been oversubscribed, following sizeable requests made within the final days of its fortnight-long roadshow.
TelecomFinance understands…
Russian mobile operator MegaFon is expected to announce shortly that the order book for its upcoming IPO in London has been oversubscribed, following sizeable requests made within the final days of its fortnight-long roadshow.
TelecomFinance understands there was strong demand for the shares yesterday (26 November), when many US investors returned to work after the Thanksgiving holiday, suggesting the IPO will raise the target US$1.7bn to US$2.3bn. The IPO has the potential to become the largest by a Russian company in more than two years.
A source close to the IPO process told TelecomFinance pricing will be announced tomorrow, when trading is also set to begin.
Late last night, the UK’s Financial Times reported that MegaFon had received orders for all shares offered in the IPO, boosted by an investment fund’s order for more than US$170m worth.
This morning, MegaFon shareholder TeliaSonera announced its president and CEO Lars Nyberg plans to invest US$2m of his own funds in the IPO. Nyberg, also a member of MegaFon’s board of directors, said he will purchase the shares at the offer price.
“I have a strong belief in the future prospects of MegaFon,” he said.
“As a member of the MegaFon board, making a sizeable investment in the company is a way for me to show my commitment.”
The developments will come as a relief to sellers TeliaSonera and MegaFon subsidiary MegaFon Investments (MICL), which attempted to quell investor concerns over corporate governance after Goldman Sachs decided not to participate in the IPO process as a lead manager.
MegaFon – whose controlling shareholder is Russian businessman Alisher Usmanov’s AF Telecom – is selling global depository receipts in London and Moscow. The company has set the indicative price range at US$20 to US$25 per share, valuing the company at US$11.2bn to US$14bn. The roadshow took in the US, UK, Russia and wider Europe.
Usmanov will retain his 50% stake plus one share in the company, while Sweden’s TeliaSonera is expected to reduce its stake from 36% to 25%.
Morgan Stanley and Sberbank are joint global coordinators and joint bookrunners for the IPO, and Citi, Credit Suisse and VTB Capital are acting as joint bookrunners.
MegaFon was not immediately available for comment.
