Russia's two leading cell phone providers, Mobile TeleSystems (MBT) and VimpelCom (VEON -0.51%), may be teaming up to buy a smaller player in the market -- Tele2 Russia.
On Thursday, the companies submitted a "joint letter" to management at Sweden's Tele2 AB, expressing interest in buying the Stockholm-based telco's Russian subsidiary. The parties intimated that at the right price -- anywhere from $4 billion to $4.25 billion, say, inclusive of net debt -- they'd be happy to take Tele2 Russia off Tele2 AB's hands.
The main wrinkle here is that Tele2 AB already has an offer in hand from Russia's VTB Bank, and VTB Chairman Yuri Soloviev says his bank's offer of $3.5 billion (also inclusive of $1.2 billion in net debt) is "legally binding, it is done." Adding to the confusion, oligarch Mikhail Fridman's investment vehicle, A1, has floated the idea of paying between $3.6 billion and $4 billion -- although if Tele2 AB wants to pick a suitor other than VTB, it's not clear why it would jump ship to the lower of the two alternative offers.
As for MTS and VimpelCom, they say the price they're willing to pay would provide "vastly superior value" than the one VTB has made, and are "prepared to enter into discussions immediately with the aim of being able to conclude a transaction within a short time frame." Stay tuned.
