(Corrects number of Smarts subscribers and ranking in the last paragraph.)
OAO Smarts, the Russian mobile- phone company based in Samara, declined to confirm a Vedomosti report that OAO Mobile TeleSystems (MBT:US) offered to buy it for $1 billion.
``We will not comment,'' Smarts Chief Executive Officer Andrei Girev said in a phone interview today. ``We continue talks with a wide group of investors.''
Mobile TeleSystems, Russia's largest mobile-phone operator, has offered to buy Smarts for $1 billion, Vedomosti reported today, citing an unidentified person close to AFK Sistema, Mobile TeleSystems' parent company.
Mobile TeleSystems and its smaller Russian competitor OAO VimpelCom (VIP:US) are looking to buy regional operators to strengthen their position in the domestic market, which has more than 166 million mobile-phone users. Russian media reported last year that VimpelCom offered to buy Smarts for $750 million.
Mobile TeleSystems made its offer to holders of 97 percent in the company, excluding OAO VolgaTelecom, Vedomosti reported. The offer includes Smarts's debt of between $200 million and $250 million, the Russian daily said.
Mobile TeleSystems spokeswoman Irina Osadchaya and Sistema spokesman Kirill Semenov declined to comment when contacted by Bloomberg News by phone in Moscow today.
Smarts is active in 15 Russian regions and has more than 4 million users, making it Russia's seventh-largest mobile- phone operator. Chairman Gennady Kiryushin and his son, Konstantin Kiryushin, have more than 50 percent of the company, according to information on its Web site.
To contact the reporter on this story: Lyubov Pronina in Moscow at email@example.com.
To contact the editor responsible for this story: Lars Klemming at firstname.lastname@example.org.