MegaFon May Pay $1.3 Billion for 50% of Phone Retailer Euroset
OAO MegaFon (MFON), Russia’s second-largest mobile operator, said it may spend as much as $1.33 billion to acquire as much as 50 percent of handset retailer Euroset Holding NV.
MegaFon agreed to buy 25 percent of Euroset’s shares and secured an option to buy another 25 percent from billionaire Alisher Usmanov as soon as one year from now, the operator said in a regulatory filing, citing a vote by its board of directors. The combined 50 percent stake is valued at $1.33 billion, the company said.
Euroset is Russia’s largest handset retailer. Its founder, Yevgeny Chichvarkin, fled to London in 2008 after a criminal investigation was opened against him and sold the company to billionaire Alexander Mamut and mobile operator VimpelCom (VIP) Ltd.
In 2011, Euroset scrapped a planned London share sale. Mamut agreed to sell 50 percent of Euroset to MegaFon and Usmanov, Kommersant said last month. Usmanov will partly pay with his stake in Internet publisher SUP Media, the newspaper reported.
VimpelCom will continue to own about 50 percent of the retailer. Russian operators are avoiding buying controlling stakes in independent retailers because consolidating them in their balance sheets would dilute profit margins, said Konstantin Belov, an analyst at Moscow-based UralSib Capital.
To contact the reporter on this story: Ilya Khrennikov in Moscow at firstname.lastname@example.org