MTS board approves acquisition of Sistema Telecom for $380 mln
MOSCOW. Dec 10 (Interfax) - The board of directors of Mobile TeleSystems (MTS) has approved acquisition of 100% of Sistema Telecom from parent company AFK Sistema .
The approval is in line with the recommendation of the special committee of independent directors.
The deal is scheduled to close before the end of the year, once it has been approved by shareholders at an extraordinary meeting on December 21.
The deal totals 11.59 billion rubles ($379 million). MTS will also assume 1.8 billion rubles ($58.93 million) in debt, including 1.35 billion rubles ($44.04 million) that Sistema Telecom owes to MTS subsidiaries.
ING performed the valuation of Sistema Telecom and served as the independent financial consultant to the special committee. ING confirmed that the deal was justified. In addition, Ernst & Young conducted a comprehensive evaluation of Sistema Telecom. Latham & Watkins is the legal advisor.
Sistema Telecom owns 45% of TS-Retail (MTS has the other 55%), holds 2 billion rubles ($65.5 million) in veksels (promissory notes) issued by MTS and holds rights to Sistema's "umbrella" egg logo, including the MTS, Comstar-UTS and Moscow City Telephone Network trademarks.
RTS$#&: AFKS, MTSS