VimpelCom Ltd launched today the exchange offer for VimpelCom shares and ADRs.
The US offer runs until April 15 and the Russian offer until April 20.
Once the transaction is completed, VimpelCom Ltd will start the exchange offer for Ukraine’s mobile…
VimpelCom Ltd launched today the exchange offer for VimpelCom shares and ADRs.
The US offer runs until April 15 and the Russian offer until April 20.
Once the transaction is completed, VimpelCom Ltd will start the exchange offer for Ukraine’s mobile operator Kyivstar.
The exchange ratio used in setting the post-contribution equity ownership by VimpelCom’s and Kyivstar’s respective shareholders is 3.4:1.
VimpelCom Ltd is offering:
– one VimpelCom Ltd common DR (representing one VimpelCom Ltd common share) in exchange for each VimpelCom ADS
– Twenty VimpelCom Ltd common DRs in exchange for each VimpelCom common share
– Twenty VimpelCom Ltd preferred DRs (each representing one VimpelCom Ltd preferred share) in exchange for each VimpelCom preferred share
Alternatively, VimpelCom shares and ADSs holders can choose to receive Rbs0.01 for each common share or preferred share and Rbs0.0005 for each ADS.
VimpelCom Lts is advising shareholders not to take the cash offer because the amount being offered complies with Russian regulation and does not match fair market value.
Credit Suisse and Morgan Stanley are managing the US offer.
The Russian Governmental Commission on Foreign Investments, chaired by prime minister Vladimir Putin, has approved the merger of Russian operator VimpelCom and Ukraine’s Kyivstar.
The transaction is expected to complete in H1. Telenor will hold 38.84% of common shares and 35.42% of voting shares of the new entity to be called VimpelCom Ltd, while Altimo will hold 38.46% and 43.89%. The free float will be 22.7% and 20.69% respectively.
JP Morgan and Rothschild are advising Telenor on the deal, while VimpelCom is advised by UBS and Akin Gump Strauss Hauer & Feld.
The merger should put an end to years of legal dispute between the two main shareholders, which started when Telenor refused to approve VimpelCom’s acquisition of Ukrainian mobile operator URS, which would compete with their jointly owned operator Kyivstar.
However, with the VimpelCom-Kyivstar merger approved, Alfa Group may be forced to sell its stake in rival mobile operator MegaFon. The IT and Communications Ministry has already expressed its opposition for two mergers, VimpelCom and Kyivstar on the one hand and MegaFon and Turkish mobile operator Turkcell on the other hand.
However, Alfa argues that with TeliaSonera they are planning to merge their shareholdings in MegaFon and Turkcell, but the mobile operators will continue to be managed as separate operations. With the transaction, the two companies said they sought to gain control of Turkcell from Turkey’s Cukurova Group.
State-owned telecoms company Svyazinvest is reportedly interested in buying a controlling stake in MegaFon as part as its re-organisation which consists of consolidating its seven regional operators under the umbrella of long-distance operator Rostelecom. Svyazinvest is already in negotiations to buy Alisher Usmanov’s 31.1% stake in the mobile operator. To control the operator, Svyazinvest could either buy Alfa Group’s 25.1% or TeliaSonera’s 35.6%
The re-organisation is expected to be completed by April 2011, date after which Svyazinvest plans to list.
