Russian billionaire Mikhail Fridman to launch counter-bid for Tele2 Russia

The investment arm of Russian billionaire Mikhail Fridman is preparing to launch a $3.6-$4 billion counter bid for the Russian mobile phone business of Sweden's Tele2.

The move comes a day after Russian state-controlled bank VTB offered to buy Tele2 Russia, the country's fourth-largest telecom firm with operations in 43 Russian regions, for $2.4 billion and assume debt of $1.15 billion.

A1, an investment arm of Fridman's Alfa Group, said that VTB's offer has undervalued the cell phone operator and it is ready to offer $3.6 billion to $4 billion in cash.

A1, which also holds a majority stake in the Russian mobile operator Vimpelcom, said in a statement, ''The move on behalf of Tele2 to sell the Russian telecom business of Tele2 to the Russian bank VTB for an enterprise value of $3.55 billion (debt and equity) does not represent the best value for stockholders and is below the market value of Tele2 Russia estimated by A1.''

A1 said that it ''is interested and willing to agree to a purchase price for the remaining assets of Tele2 over a very short period of time.''

Privately-owned Alfa Group is an investment company owned by a consortium of Russian billionaires including Mikhail Fridman.

Stockholm-based Tele2 is selling its Russian assets in order to focus on its core markets in Sweden, the Netherlands, Norway and Kazakhstan.

The big operators in the Russian mobile industry are MTS with 71.2 million users, Megafon 62.6 million, Vimpelcom 56.1 million, Tele2 22.7 million and Rostelecom 13.6 million.

For some unknown reasons, Tele2 is refusing to sell its Russian assets to A1 and said that it would go ahead with the VTB deal.

''I have just read this statement [by A1] and would like to say that we are very pleased with our deal with VTB, which we think is a very strong deal,'' Tele2 spokesman Lars Torstensson said.

Post acquisition, VTB would sell Tele2 assets to MTS, Megafon or Rostelecom.

Mikhail Fridman, Russia's seventh-richest man, is part of the consortium that recently sold their 50 per cent stake in Russian oil company TNK-BP to Russian state oil giant Rosneft for $27.7 billion.