Vimpelcom bid threatens Telenor ties

 
City A.M. Reporter
NORWAY’S Telenor raised the prospect of yet another legal fight and the possibility of severing ties with Vimpelcom over a proposed bid by the Russian firm for Egyptian tycoon Naguib Sawiris’ telecoms assets.

Telenor said yesterday it was disappointed by Vimpelcom’s board approval of a revised bid for Italy’s Wind and Cairo-based Orascom Telecom from Sawiris and demanded its pre-emptive rights be safeguarded in the sale of new shares.

The row threatens a 2009 peace deal struck after years of acrimony between Vimpelcom shareholder Altimo and Telenor. But Vimpelcom said the deal with Sawiris would not alter this.

Russia’s second-biggest mobile phone company wants to grab a share of high-growth emerging markets by purchasing Cairo-based Orascom Telecom from Sawiris and tapping its first developed market through Italy’s Wind.

But Telenor is worried about the outlook for Orascom’s lucrative Algerian unit Djezzy, which faces nationalisation, and the debt load of its mother company Wind. It also objects to the way the share offer is being structured.

“We see this as an obvious deception that violates the Vimpelcom shareholders agreement,” said Telenor, which rejected Vimplecom’s initial deal in December.

Shares in Telenor fell 2.7 per cent to 90.3 Norwegian crowns (NOK). Shares in Orascom jumped three per cent on the news and closed at US$3.82.