Orascom Telecom board rejects Altimo takeover offer

Orascom Telecom Holding’s board of directors has rejected the offer from Russia’s Altimo to buy the remainder of the company that it does not already own.

Altimo owns just under 48 per cent of VimpelCom which in turn already owns 52 per cent of Orascom Telecom, and last month launched a bid to buy the outstanding shares in the company, through a Cyprus based holding company.

The deal values Orascom Telecom at around US$3.67 billion, a small premium on the then stock market valuation of US$3.4 billion.

A review of the takeover offer commissioned by OTH’s board of directors found that the offer price of US$0.70 per share was undervalued. The review suggested that Altimo would need to raise its bid by nearly 19 per cent to US$0.86 per share before the board could recommend it.

Members of the board affiliated with VimpelCom abstained from voting on the tender offer due to a conflict of interest arising from the shareholding relationship between Altimo and VimpelCom.

Orascom Telecom said in a statement that it was recommending that shareholders do not accept the takeover bid offer.