Tele2 confirms sale of subsidiary to VTB

Tele2 confirms sale of subsidiary to VTB

Tele2 has confirmed the sale of its subsidiary, Tele2 Russia, to VTB bank despite being aware of its other options, including bids from Russian operators MTS and VimpelCom.

According to Reuters, investment group A1 made an all-cash bid of $3.6 billion to $4 billion last week, and MTS and Vimpelcom are also said to have joined forces to offer $4.25 billion for the sale.

“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,” the company said.

The result has left Mikhail Fridman, founder at A1, saying he could take legal action to secure the company’s right to buy the subsidiary.

Tele2 told reporters that under terms of its deal with VTB, it had rights to half of net cash profits VTB obtains from certain transfers of Tele2 Russia assets, for one year after the deal is closed.

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