Sweden’s Tele2 Group has clarified some of the details about the agreement to sell its Russian subsidiary to the VTB Group. Shortly after the deal was announced, a counter offer was made by Mobile TeleSystems (MTS) and Vimpelcom, offering a roughly 30% premium over the USD2.4 billion that Tele2 had initially agreed to sell the unit for. Tele2 states: ‘The board of directors’ decision to enter into this transaction was based on its experience in owning and successfully developing Tele2 Russia over many years, and a full awareness of all strategic options available to Tele2 with respect to its Russian business. Tele2 has been advised by Morgan Stanley as financial adviser and Davis Polk and Mannheimer Swartling as legal and regulatory advisers’. In addition, under the terms of the deal, if VTB opts to sell the mobile network on to another buyer within a year of completing the transaction, Tele2 will receive half of any cash profit made by VTB.
In related news, Dow Jones Newswires reports that the existing Tele2 Russia branding will be preserved following the company’s sale to VTB. Citing ‘a person close to Tele2 Russia’, the press agency claims that the clause is ‘a special part of the agreement … There is a number there – ten years with a possibility of prolongation’.