VimpelCom puts Wind off limits to Sawaris, as MegaFon gains ground in Russia

VimpelCom-owned units Wind in Italy and Orascom in Egypt have recently been eyed up by well-known billionaire investors, but the Russian operator has now said Wind is not for sale while Orascom has recommended to its shareholders that they reject an offer made in March by a subsidiary of Russian billionaire Mikhail Fridman's Altimo.

According to a Bloomberg report, VimpelCom has said it does not plan to sell Wind, which is "outperforming competitors by growth in subscribers and revenue," said VimpelCom CEO Jo Lunder, in what is seen as an effective rebuff to former Wind owner Naguib Sawiris. Reports recently said that Sawiris is interested in re-entering the Italian telecoms market, and has been considering various assets, including Wind.

Meanwhile Orascom, which is 51.92 per cent owned by VimpelCom, recommended that shareholders reject an offer by a subsidiary of Russian billionaire Mikhail Fridman's Altimo to buy the company for $0.70 a share, according to Reuters. Altimo also owns a 47.85 per cent share in VimpelCom.

Amid the interest in its key foreign shareholdings, VimpelCom is also facing some turmoil on its home territory. After reporting a below-forecast 28 per cent rise in net profit to $408 million (€317 million) in the first quarter of 2013, the operator was faced with the news that it is being put further in the shade by rival operator MegaFon, which has just overtaken bigger rival MTS by market value.

According to Reuters, MegaFon reported a 36.5 per cent rise in first-quarter net income to €311 million, above the €261 million forecast by analysts in a Reuters poll. The company has benefited from cost-cutting measures it implemented last year, and also said it would pay a $1.3 billion dividend.

"MegaFon has probably shown the strongest results that any other operator is unlikely to match," Anna Lepetukhina, an analyst at Sberbank Investment Research, told Reuters.

Bloomberg further noted that since its November initial public offering, shares in MegaFon have risen by 69 per cent, valuing the company at $20.9 billion, above $20.7 billion for MTS in New York.

For more:
- see this Reuters article
- see this Bloomberg article
- see this separate Bloomberg article

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