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Articles & publications
28.05.2010
Svyazinvest heads for TatarstanVedomosti, Timofei Dzyadko
Svyazinvest has taken the first step during the new management in closing a large transaction. The holding, which does not have a footprint on the fixed-line market of Tatarstan, has signed an agreement to acquire 100% of the region’s largest alternative telecom operator, Teleset Networks, for $133.5 mln.
VolgaTelecom, which is controlled by Svyazinvest, has made an offer to the shareholders of Cyprus-based Teleset Networks, offering $0.08 per each share or $133.5 mln for 100% of the company, according to the operator’s press service. The offer has been accepted by 98.19% of the company’s shareholders, according to a statement issued by the Cyprus-based operator. A purchase/sales agreement has been concluded with them, and the remaining shares are subject to buyback on a mandatory basis if their holders refuse to accept the offer within four months.
The price offered by VolgaTelecom is 1.6 times higher than the capitalization of Teleset on the AIM London Stock Exchange at the close of trading on Wednesday. Yesterday, following the news on the offer the company’s shares rocketed 47.9% to $119.9 mln. The premium to the current market valuation of Teleset’s shares is not indicative “given the fact that the company’s shares are not sufficiently liquid, according to VolgaTelecom’s presentation devoted to the transaction. A spokesman of Teleset had the following to say: “The price reflects the high quality and excellent condition of the company’s business.
Last year takeover negotiations were held between Teleset Networks and Comstar-UTS, but the latter was not satisfied with the price.
VolgaTelecom forecasts that Teleset’s EBITDA will amount to RUR 651 mln in 2010 (about $22 mln), while its six EBITDA metrics look quite acceptable, Gazprombank analyst Anna Kurbatova points out. VolgaTelecom appraised the operator in the upper range of a reasonable valuation, says Nadezhda Golubeva with Unicredit Securities. In addition, the deal will allow Svyazinvest to enter a new region, Kurbatova goes on to say.
VolgaTelecom had no presence on the market of Tatarstan except for cellular telephony. Kazan GTS and Tattelecom were owned by the local government and for this reason did not participate in 2002 in the formation of this regional telecommunications operator (RTO) controlled by Svyazinvest. Teleset, according to its in-house estimates, controls 30% of the fixed-line market in Kazan, 10% in Naberezhny Chelny and 13% in Ulyanovsk.
This transaction fits squarely with the strategy of VolgaTelecom which aims to achieve rapid development in the broadband Internet segment, expansion into neighboring regions and stronger positions on the fixed-line telecom market, according to a statement made by chairman of the board of directors of VolgaTelecom and the general director of Svyazinvest, Evgeny Yurchenko. This is the first major transaction since his appointment in February 2009 and is consistent with Svyazinvest’s concept of achieving leadership on the basis of the merged Rostelecom, which was approved in September 2009, Mr. Yurchenko went on to say.
In the buying mood
Svyazinvest is interested in other assets as well. According to earlier reports, the holding has set its sights on Internet provider Akado and NetByNet, as well as cellular operators Tele2 and SMARTS. But so far no deals have been closed.
Teleset Networks, holding company. Main shareholders - Manglis Holdings Ltd (26%), Celltech Ltd (15%), and F&S Telecom (15%). AIMS capitalization - $119.88 mln (IFRS, 2009): revenue - $30.9 mln, EBITDA - $18.376 mln, and net profit - $8.73 mln.
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