Rostelecom Gains Most in 2 Weeks on Buyback Offers: Moscow Mover

OAO Rostelecom headed for the biggest gain in almost two weeks as Russia’s largest fixed-line operator started accepting offers from shareholders after proposing to buy back stock at a premium to the market.

Rostelecom increased as much as 2.4 percent, rising 1.8 percent to 89.76 rubles by 4:13 p.m. in Moscow and poised for the biggest advance since June 17. The amount of shares trading was 1.8 million, equivalent to about 45 percent of the three-month average.

The company started accepting buyout offers from investors who didn’t vote or voted against its merger with OAO Svyazinvest from June 27 and will continue until Aug. 12, according to a statement. The company set a buyout price for its ordinary shares at 136.05 rubles ($4.12) apiece, it said in a March 27 announcement.

“The share buyout is the key driver for Rostelecom’s stock right now,” Sergey Libin, an analyst at ZAO Raiffeisenbank, said by phone from Moscow. “The company is offering a very good premium to the market price.”

The record date for holders of Rostelecom shares to participate in the buyout was May 15. Rostelecom has fallen 23 percent since then.

“Speculators who made the May 15 record date may have sold the stock afterwards and are now buying it back at a cheaper price so they can reap a higher premium,” Konstantin Chernyshev, an analyst at UralSib Capital, said by phone from Moscow.

Shareholders representing 62 percent of Rostelecom’s ordinary and preferred capital participated in the vote on June 26, with 98 percent of the voting shareholders supporting the merger with Svyazinvest, according to the June 27 statement.

The company set a price of 95.24 rubles a share for its preferred stock, which traded down 1.5 percent at 73.04 rubles today. The volume of preferred shares traded was about 62,000 or 13 percent of the three-month daily average.

To contact the reporter on this story: Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net

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