OAO VimpelCom (VIP:US), Russia's second- largest mobile-phone company, started its offer to buy Nasdaq- listed Golden Telecom Inc. (GLDN:US) for $4.3 billion to create Russia's first integrated mobile and fixed-line provider.
VimpelCom will pay $105 a share for all of Golden Telecom, the Moscow-based company said in a statement today. The tender offer will expire on Feb. 15 unless extended, VimpelCom said.
The deal will give VimpelCom about 400,000 new broadband Internet customers and a foothold in fixed-line phone services. The company, whose biggest shareholders are Norway's Telenor ASA (TEL) and billionaire Mikhail Fridman's Alfa Group, said in December it will take two to six months to complete the purchase.
``We are aware that the offer has been made,'' Anna Ivanova- Galitsina, a spokeswoman in Moscow for Telenor, said in a telephone interview. ``The offer will be reviewed by the management and communicated to the Telenor board.''
Telenor, Norway's largest phone company, owns 18.4 percent of Golden Telecom and 29.9 percent of VimpelCom. Altimo, a technology unit of Alfa Group, holds 26.6 percent of Golden Telecom stock and 44 percent of VimpelCom.
Altimo Vice President Kirill Babayev declined to comment today. Svetlana Samoilova, acting head of investor relations at OAO Rostelecom, Russia's dominant fixed-line long-distance calls provider, said the company will take a decision during the period of the tender offer on its 11 percent holding in Golden Telecom.
Rostelecom Chief Financial Officer Andrei Gaiduk said last year it may sell the stake.
`Below Fair Value'
``We see great long-term potential for VimpelCom from a corporate perspective and because it is paying significantly below fair value,'' James Beadle, portfolio manager at Pilgrim Asset Management in Moscow which manages $200 million in assets including shares in VimpelCom and Golden Telecom, said in an interview today.
``The directors of Golden Telecom have failed in their most fundamental responsibility to maximize shareholder value, as they have accepted an offer which undervalues the company by about 25 percent to 30 percent,'' Beadle added. ``Golden Telecom is excellently positioned in the fastest growing areas of the telecoms sector, as such its standalone value is above the offer price.''
He said Pilgrim has not made a decision on its stake in Golden Telecom.
Anastasia Borzova, a spokeswoman for Golden Telecom was not immediately available for comment.
Golden Telecom stock (GLDN:US) more than doubled in 2007. The shares rose 0.4 percent to $102.12 as of 11:31 a.m. in New York, valuing the company at $4.1 billion. Golden Telecom shares trade at 34 times its estimated earnings, according to data compiled by Bloomberg.
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