VimpelCom Ltd.’s board has approved the purchase of Egyptian billionaire Naguib Sawiris’ telecom assets for revised USD 6.5 billion merger deal, said a statement issued by the group.
This approval from VimpelCom board came despite of Telenor’s opposition for the deal for merger, which holds a 36% voting and 39.6% economic interest in VimpelCom Ltd.
“We did not support the original proposal because it did not make strategic or financial sense. The revised proposal makes even less sense as the consideration now being offered is even more generous to the owners of Wind Telecom”, said Telenor spokesman Dag Melgaard.
Telenor’s directors voted against the deal, with the remaining six directors voting in favor, VimpelCom said the statement issued by VimpleCom.
“While we acknowledge Telenor’s divergent view, we believe the majority of our shareholders recognize the strategic and financial merits of this transaction,” said VimpelCom Chairman Jo Lunder.
Under the new terms, VimpelCom will pay $1.495 billion in cash and 325.6 million new common shares and 305 million new convertible preferred shares to Naguib Sawiris after previously agreeing to pay $1.8 billion in cash and 325.6 million new common shares and 305 million new convertible preferred shares.
In return, VimpelCom will hold 51.7 percent of Orascom Telecom and 100 percent of Italy’s Wind.
The number of common issued shares for the deal remained unchanged.
VimpelCom and Wind last year delayed the signing of a shareholder agreement as Orascom tried to resolve a dispute with the Algerian government over its local unit, Djezzy.
The Algerian government, which wants to buy Djezzy, ordered Orascom to pay more than $800 million in back taxes and banned it from transferring money abroad, penalties that Orascom has contested. The Egyptian company has said it could be in international arbitration by the second quarter of this year unless it can resolve the dispute.
VimpelCom, listed on the New York Stock Exchange, was formed from the consolidation of Russian billionaire Mikhail Fridman’s Alfa Group and Telenor’s holdings in Russian and Ukrainian mobile-phone operators.