Telenor seeks to block deal by Vimpelcom

 
City A.M. Reporter
NORWEIGAN communications group Telenor is taking mobile group Vimpelcom to arbitration over its planned $6bn (£3.8bn) purchase of telecoms groups Wind and Orascom, a move likely to mire the deal in a lengthy legal tussle.

Telenor, which owns nearly 40 per cent of Russia’s Vimpelcom, said yesterday it had requested an arbitration tribunal over a part of the deal that prevents it from exercising pre-emptive rights over a share issue.

Vimpelcom announced a $6bn cash and shares deal to buy Italy’s Wind and control of Egypt’s Orascom from Egyptian tycoon Naguib Sawiris last month, which could create one of the world’s biggest telecoms operators.

Telenor has vowed to fight the transaction – which it says is too risky and will reduce its influence over the company – putting it at loggerheads with Mikhael Fridman’s Alfa group.

Telenor and Alfa’s telecoms unit Altimo are no strangers to conflict, having fought a series of legal disputes over Vimpelcom’s strategy before a truce was called in 2009.

Telenor’s shares were down 0.9 per cent in early trade, in line with wider global markets.

Telenor spokesman Dag Melgaard said the company had appointed an arbitrator – a private legal method not decided in public courts – and the tribunal will be based in London.

Altimo said in a statement it would “vigorously contest” the claims and was confident of victory.