With only three seats on the nine-man board, Melgaard concedes Telenor will need help to get the deal thrown out WSJ.com reported.
Telenor puts brakes on VimpelCom acquisition
VimpelCom’s €5 billion acquisition of Weather Investments could be on the skids after major shareholder Telenor revealed it won’t back the plan.
The Norwegian telco, which owns 39.6% of VimpelCom, doesn’t believe the merger offers good value to shareholders, despite the prospect of creating the world’s fifth largest mobile carrier in terms of subscriber numbers.
“We strongly support VimpelCom’s expansion in accordance with the principles agreed at the time the company was created. However...we do not believe this transaction makes strategic or financial sense,” Telenor spokesman Dag Melgaard explained.
VimpelCom stands to gain controlling stakes in Orascom Telecom and Wind through the deal, which was announced early October.
The combination with Weather Investments would create a company with revenues of $21.5 billion (€16.3 billion) and EBITDA of $9.5 billion, based on 2009 figures.
VimpelCom’s board will consider Telenor’s block at a board meeting scheduled to take place this week to finalize the deal, it stated.