Telenor boosts VimpelCom stake with $715M JP Morgan deal

Norwegian telco Telenor has boosted shareholding in VimpelCom after exercising an option on shares owned by JP Morgan Securities. The $715 million deal will provide Telenor with a much greater say in the Russian operator's strategy and strengthen its position in a long-running corporate struggle with other shareholders.

The transaction will see Telenor acquiring 65 million VimpelCom shares from JP Morgan, and increase its shareholding to 35.66 per cent from 31.67 per cent earlier. The company now controls 39.55 per cent of the votes, up from 36.66 per cent before, according to Reuters.

The two other main shareholders in VimpelCom are Altimo with 31.35 per cent and Egypt's Weather Investments with 18.8 per cent. The rest is held by minority shareholders, said a Telegeography report.

Commenting on the move, VTB Capital analysts Victor Klimovich and Natalia Pichugina wrote in a note to clients carried by Reuters: "The news is rather negative for minority shareholders as we see a further risk of company-transforming M&As in the medium term, which might be unfavourable for them."

The VTB Capital note added: "We think Telenor might be interested in further strengthening, or even consolidating, its position in VimpelCom."

Telenor lost an internal battle last year when it opposed a deal that saw VimpelCom acquire Egypt's Weather Investments in a part cash/share transaction. This dilution in the Norwegian telco's shareholding has now been rectified following the JP Morgan deal.

For more:
- see this Reuters article
- see this Telegeography article
- see this Cellular News article

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