Vimpelcom, the second-largest wireless operator in Russia, agreed last Friday to purchase Golden Telecom (GT) in a $4.3 billion transaction that, according to the companies, will create “the first fully integrated telecom service provider across Russia and the [Commonwealth of Independent States].” The deal follows a month of talks between Vimpelcom and GT, a provider of fixed line and broadband data services that also ranks as Russia’s largest supplier of telecom services to businesses. Telenor of Norway and Russia’s Alfa Group are the two largest shareholders of GT, which is also listed on the Nasdaq stock exchange. By January 18, a subsidiary of Vimpelcom will submit a tender offer of $105 for each outstanding share of GT stock, and any shares that remain untendered at the end of that process will qualify to receive $105 in cash. Sources note that the offer represents a premium of 3.5% over GT’s closing price on November 30 (i.e., the business day before the start of negotiations between the companies) as well as a premium of 10.1% and 27.6% over GT’s average closing price over the past 60 and 120 days, respectively. The deal is subject to regulatory approval. Notwithstanding the premiums, a spokesman for Texas-based investment firm Kleinheinz Capital Partners, whose clients own a 2% equity stake in GT, charged that the proposed takeover terms “massively undervalue” GT and its prospects.
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Vimpelcom to purchase Golden Telecom for $4.3 billion
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