Russia’s largest mobile operator MTS is reportedly in talks to acquire Moscow-based telco Akado in an effort to expand its presence in the region.
Russian daily Kommersant cited an unidentified telecoms sector source as saying MTS, also Moscow-based,…
Russia’s largest mobile operator MTS is reportedly in talks to acquire Moscow-based telco Akado in an effort to expand its presence in the region.
Russian daily Kommersant cited an unidentified telecoms sector source as saying MTS, also Moscow-based, has made an offer to Akado owners – Russian oligarch Viktor Vekselberg’s Renova Group and fellow businessman Yuri Pripachkin – and that the matter is being discussed.
MTS declined to comment and Akado, a triple-play operator providing broadband, cable TV and telephony services, was not immediately available for comment.
According to the Russian report, Vekselberg, who owns 67% of Akado, and Pripachkin, who owns 33%, valued the company at more than US$1bn a year ago. However, the report cited Advance Capital managing director Dmitry Kasyanenko as saying that its current value is between US$800m and US$900m.
If such a deal is successful, MTS will have a market share in Moscow of nearly 50%, while its largest rival there, VimpelCom, has only a 22.7% share, the paper stated.
Alfa Bank telecoms analysts Elina Kulieva and Dmitry Doronin said the US$1bn-plus valuation a year ago implies 6.0x-7.0x EV/EBITDA, above the current valuation of just 4.9x EV/EBITDA.
Kulieva told TelecomFinance that, depending on price, such a deal should benefit MTS by enabling it to achieve a leading position in the Moscow fixed broadband market.
“However, from the other side, any potential M&A deals for MTS might pose a risk for the company’s dividend stream going forward.”
In May, Russian news agency Interfax quoted Vekselberg as saying that that he would consider a good offer for Akado but is in no hurry to sell.
In mid-2011, Russia’s second-largest mobile operator MegaFon was reportedly in talks to acquire Akado. At the time, Pripachkin was quoted by local media as saying that US$1.2bn would be a fair price.
