OSLO: Telenor stepped up its fight against Vimpelcom by seeking an injunction to force the Russian telecom to issue shares to the Norwegian telecom if a cash-and-shares deal for Wind Telecom is completed.
The move by Telenor, which owns 36 percent of Vimpelcom, escalates a private arbitration case in which it wants to block Vimpelcom buying Italian group Wind and control of Egyptian operator Orascom Telecom from Naguib Sawiris in a $6 billion deal.
Telenor has said the deal was too risky and accused Vimpelcom and rival shareholder Altimo Group of "dirty tricks" for what it sees as an effort to circumvent its pre-emptive rights in share issues.
Now, Telenor is seeking a ruling by the Commercial Court in London to preserve its rights and boardroom influence if the deal goes through in a shareholder vote set for March 17.
Telenor said it was seeking an injunction requiring Vimpelcom to issue it pre-emptive rights shares at the same time that Vimpelcom issues shares to Wind Telecom shareholders if that acquisition is completed.
"Telenor has proposed that its shares be placed in escrow until the arbitration tribunal has reached a decision, on the condition that Telenor will pay the full purchase price for its shares to the escrow agent when the shares are issued."
Carnegie Investment analyst Espen Torgersen said Telenor’s action "makes it a bit more difficult for the board and management of Vimnpelcom. Instead of just sitting and waiting for the arbitration case to come up, the idea here is to try to hinder the way forward.
"They (Telenor) are now saying indirectly that the other shareholders can go ahead and vote for the acquisition, so long as they print up the shares Telenor is entitled to receive if it wins in an arbitration." –Additional reporting by Joachim Dagenborg
