Telenor rejects VimpelCom's revised bid for Wind Telecom
Telenor has rejected a revised proposal for VimpelCom's acquisition of Wind Telecom.
Vimpelcom's revised proposal to acquire the telecom assets of Egyptian entrepreneur Naguib Sawiris came under fire from its second biggest shareholder, Telenor, which said it "will try to stop" the deal from going ahead.
Telenor confirmed that it will vote against a revised proposal under which Russian telco Vimpelcom plans to merge with Naguib Sawiris' Wind Telecom.
The revised deal has already been approved by six of Vimpelcom's nine board members, with Telenor's three directors rejecting it.
Under the revised deal, VimpelCom will own, through Wind Telecom, 51.7% of Orascom Telecom and 100% of Wind Italy, making Vimpelcom the world's sixth biggest mobile phone operator by subscriber numbers.
Telenor's three nominees on the VimpelCom board voted against the acquisition because they believe it makes no "strategic or financial sense for VimpelCom and will harm VimpelCom's shareholders".
Dag Melgaard, a spokesman for Telenor, said that the revised deal proposal made "even less sense" than the original proposal, which it also rejected.
"The revised proposal makes even less sense as the consideration now being offered is even more generous to the owners of Wind Telecom.
"Existing VimpelCom shareholders face considerable additional dilution if this acquisition is completed on the terms approved by the board," he said.
The new proposal will lead to dilution of VimpelCom minority shareholders voting rights, from 18.6 % at present, to just 12.9 % following the deal, despite their "economic stake" in the company being worth 16.3 %.
"In our view, the disconnect between economic and voting stakes negatively affects the attractiveness of VimpelCom as an investment case for public investors," Melgaard said.
"At the upcoming VimpelCom shareholders meeting, we will vote against the approval of the issuance of the new shares to Wind Telecom's owners, and we urge VimpelCom minority shareholders to do the same."