MegaFon shareholders approve acquisition of stake in Mail.ru
MOSCOW. Jan 23 (Interfax) - Shareholders in MegaFon voted at an extraordinary meeting on January 20 to approve the acquisition of a stake in Mail.ru Group, the telco said in a statement.
More than 209.29 million votes were cast in favor, with 10.76 million against and 176,500 abstentions. Telia Company took part in the voting, which owns 25.17% of MegaFon, minority shareholders and the operator itself which owns 3.92% of quasi shares.
MegaFon's majority shareholder USM Group, which belongs to billionaire Alisher Usmanov and his partners did not take part in the voting, since it was a pending deal and they had an interest in it.
MegaFon said at the end of last year that it planned to acquire 63.8% voting shares (15.2% issued shares) in Mail.ru from USM - Ned Media and Technology Investment, New Media Technologies Capital Partners and Ardoe Finance.
It is expected that MegaFon will pay $740 million for the shares. A total of $640 million is subject to payment the moment the deal is closed and a further $100 million should be paid a year after the deal is closed. MegaFon will buy Mail.ru shares with a 24% premium on the market, based on prices on December 22, a day before the deal was announced.
The deal plans to be closed in Q1 2017. Before that Megafon needs to receive approval from Russia's Federal Antimonopoly Service (FAS). The FAS received the corresponding request on January 11, and a decision should be made in the next 30 days. FAS chief Igor Artemyev told journalists last week that as of now he does not see problems for the market with the deal.
Megafon is expected to have 5 out of 10 members in Mail.ru's board of directors and fully consolidate the holding in its reporting.
The acquisition of the controlling stake in the internet company is part of MegaFon's digital strategy. The operator's revenue from mobile services in 9M 2016 fell by almost 2%, while internet revenue increased only 7% ending its double-digit growth, despite growing 18.6% a year before. The deal should bring MegaFon's financials back toward robust growth.
The mobile phone operator and internet holding have already agreed upon joint product development. In particular, mobile offers for users of the social network site VKontakte will be created, through the use of MegaFon and Yota, a subsidiary of MegaFon, with the launch of a special service VK Mobile. Sources said that the project is a virtual mobile operator.