Russian telco MTS plans to discuss in-country consolidation with VTB Group now the state-controlled bank’s deal to acquire Tele2 Russia has closed.
An MTS spokesperson confirmed the company does not intend to fight the deal now it is complete, saying…
Russian telco MTS plans to discuss in-country consolidation with VTB Group now the state-controlled bank’s deal to acquire Tele2 Russia has closed.
An MTS spokesperson confirmed the company does not intend to fight the deal now it is complete, saying “[w]e would like to understand better what VTB’s plans are with regards to the asset”.
Sweden’s Tele2 announced the successful completion of the sale of its Russian operations to VTB for a total US$3.55bn last week. MTS in partnership with VimpelCom and the Alfa Group’s investment arm A1 had presented higher counter offers of up to US$4.25bn including debt, and up to US$4bn in cash respectively. The rival bidders argued the deal with VTB did not represent the best value for shareholders and A1 managing director Dmitry Vozianov was quoted as saying the firm was considering taking legal action.
Reuters has since quoted MTS CFO Alexey Kornya as affirming the company – Russia’s largest mobile operator – would still like to “develop” the Tele2 Russia assets, noting that he did not rule out the option of working with VTB.
In its statement last week, Tele2 said it retained the right to half the profits if VTB chooses to sell the Russian business within a year.
VTB has made no secret of the fact it considers Tele2 Russian a “private equity investment”, describing it as such in its own statement last week.
A VTB spokesperson today confirmed that the organisation does not intend to keep Tele2 permanently.
“As a financial investor, VTB has target time to exit any asset of three years maximum. VTB is looking at potential shareholders who will give the company strategic value, be it Russian or foreign investors. Our aim is to create value for the company”.
Meanwhile, Bloomberg has cited Renaissance Capital and Otkritie Financial Corp as saying VTB may sell Tele2 Russia to state-controlled telco Rostelecom.
