OSLO: Shareholders of Russia's Vimpelcom approved Thursday a $6.5-billion deal to buy Wind Telecom, sending another blow to Norway's Telenor, a major Vimpelcom shareholder which staunchly opposes the deal.
The purchase -- okayed by 53 percent of Vimpelcom's shareholders gathered at an extraordinary general assembly in Amsterdam -- will make Vimpelcom, which is specialised in emerging markets, the world's number six telecoms operator.
Wind Telecom holds 51.7 percent of operator Orascom, present in many African and Asian countries and Canada, and all of Italian mobile operator Wind Telecomunicazioni.
"The approval of this transformative combination with Wind Telecom by our shareholders will lead to the creation a new global telecom player with over 173 million mobile subscribers," Vimpelcom chief executive Alexander Izosimov said in a statement.
The enlarged company's annual sales would reach $21.3 billion, based on 2009 pro forma figures, and Izosimov has said potential synergies could reach $2.5 billion.
The purchase has embittered relations between Telenor and Vimpelcom's other major shareholder Altimo, the telecoms arm of Russian giant Alfa.
The Norwegian company, Vimpelcom's second largest shareholder, has repeatedly said it opposed the deal, arguing it does not make strategic or financial sense.
It has for instance argued against Vimpelcom's entrance on the Italian market, saying it was saturated and presented little opportunity for growth.
"The decision has been taken. We will respect it even though we consider Vimpelcom would be better off without Wind Telecom," Telenor spokesman Dag Melgaard said.
Altimo and Telenor had a comparable stake in Vimpelcom, with 44.7 and 39.6 percent of voting rights respectively, with the rest of voting rights in the hands of independent shareholders.
Close to 40 percent of those independent shareholders voted in favour ofthe purchase, enough to tip the balance in favour of Altimo.
Telenor, which in January launched legal action in a bid to keep its Vimpelcom stake intact, said Wednesday it had no intentions of selling its stake in the Russian company.
"Our commitment to Vimpelcom is a long-term one," Melgaard told AFP.
The company can still hope the London Court of International Arbitration will agree with its request to be granted pre-emptive rights it believes it is entitled to in connection with the share issue planned to fund Wind's purchase.
Vimpelcom and Altimo argue the Norwegian company has no such rights.
If the court does not rule in its favour, Telenor would become the third largest shareholder in Vimpelcom in terms of voting rights when the deal goes through.
It would hold 25 percent of voting rights, while Altimo would have 31 percent and Egyptian mogul Naguib Sawiris, who owns Wind Telecom, would get
30.6 percent.
Carnegie analyst Espen Torgersen said Telenor's decision to sell or not its Vimpelcom stock would probably depend on the outcome of the legal battle.
"If they lose influence, it will be very difficult for them to continue cooperating" with Altimo, he told TV2 Nyhetskanalen, explaining Telenor would not be happy "staying in the back seat."
Comments
Comments are closed.