|
Articles & publications
18.06.2010
Dissenting shareholders see the light: Far East Telecom minorities likely to approve Rostelecom mergerRBC daily, Elizaveta Sergina
The reorganization of Svyazinvest is now likely to move forward without a hitch. The state holding has managed to convince the minority shareholders of all regional telecom operators that it is advisable to support the merger with Rostelecom. As RBC Daily learned, the group of shareholders at Far East Telecom which is opposed to the merger might not hold enough votes. This is recognized by one of the deal makers – Renaissance Capital – and minority representatives. The point is that they have lost an influential ally, investor Kenneth Dart.
The fact that a group of dissenting Far East Telecom minority shareholders might not have enough votes to block a deal with Rostelecom was reported to RBC Daily by a source which represents the interests of Far East Telecom shareholders. The source said “a preliminary calculation of the votes shows there is a high degree of probability that the transaction will be approved”.
The group of dissenting shareholders initially held negotiations with the representatives of the owner of Dart Management fund Kenneth Dart, who also at that time regarded the appraisal of Far East Telecom as unfair believed it would be possible to vote against the Rostelecom merger, according to deputy chairman of the board of directors of Far Eat Telecom, Mikhail Kobishanov, who represents minority shareholder interests. “At present, Mr. Dart’s position is unknown to us. But judging by statements from IPA, the fund is prepared to support the reorganization. And in this case, the merger of Far East Telecom will likely go through”, Mr. Kobishanov pointed out.
He went on to say that some of the investors from the dissenting group have been strongly impressed by statements made by the holding’s management, which has cautioned on numerous occasions that the refusal to go ahead with the transaction could result in deterioration of the financial standing of Far East Telecom, while the company’s shares would be delisted subsequently with a much less favorable valuation. One of the three arrangers of the Svyazinvest merger transaction, Renaissance Capital, which has been leading negotiations with the minority shareholders of regional telecommunications operators, believes that the shareholders meetings of all seven of the holding’s subsidiaries will give the green light to the merger with Rostelecom this summer.
In order for the transaction to be approved at least 75% of affirmative votes should be cast by the shareholders of common and preferred shares who attend the meeting, according to the head of the investment banking department of Renaissance Capital Olga Zhilinskaya. “We’re in constant contact with the representatives of these shareholders, and so far we have quite a clear understanding that the majority will be voting for the merger, including Far East Telecom”, Ms. Zhilinskaya said.
She points out that the terms and conditions of the merger are fair for all parties to the process. Furthermore, investors are quite interested in the potential benefits from the reorganization, including significant operating synergies, higher liquidity and, as a result, major capitalization growth of the merged company further down the road”, Zhilinskaya noted.
People at Svyazinvest are counting on the support of minority shareholders. “We’re in constant contact with all large shareholders and hopefully the merger will be approved by all of the companies”, says the first deputy general of Svyazinvest, Alexander Provotorov.
Dissenting shareholders voiced their intention to block the merger of Far East Telecom in April 2010. At that time, Mikhail Kobishanov said that in the opinion of minority shareholders the appraisal of the RTO had been performed unfairly. At that time, he also noted that the proportion of dissenting minorities stood at about 25%. Right after this, several sources acquainted with the situation, reported to RBC Daily that the group of dissenting minorities included Prosperity Capital Management fund.
|
