form425.htm
Filed
by Altimo Holdings & Investments Ltd.
This
communication is filed pursuant to Rule 425 under the Securities Act of 1933, as
amended.
Subject
Company: Open Joint Stock Company “Vimpel-Communications”
Commission
File No.: 1-14522
10.02.2010
VimpelCom
Instead of Вымпелком – Vedomosti
OJSC
VimpelCom's minority shareholders have two months to decide on exchanging their
shares for VimpelCom Ltd. securities
By
Igor Tsukanov
Yesterday
holding company VimpelCom Ltd., founded in Bermuda and held equally by Russian
company Altimo (which operates Alfa Group's telecom assets) and Norwegian
company Telenor, made an offer to holders of shares and American Depositary
Shares (ADS) of OJSC VimpelCom to exchange them for its own depositary shares.
Holders of OJSC VimpelCom ADSs (traded on the NYSE) can receive a depositary
share of VimpelCom Ltd. in exchange for each such security; each common share of
the Russian operator (traded on the RTS) can be exchanged for 20 VimpelCom Ltd.
common depositary shares, and each preferred share can be exchanged for 20
VimpelCom Ltd. preferred depositary shares. The offer is open until April 20,
2010 for Russian OJSC VimpelCom shareholders, and until April 15, 2010 for
American OJSC VimpelCom shareholders.
If
the offer is accepted by holders of 95% of OJSC VimpelCom voting shares (i.e. by
at least 80.8% of
the minority shareholders) and the required approvals of Russian and Ukrainian
regulatory authorities are obtained, Telenor and Altimo in addition to their
OJSC VimpelCom shares would contribute 100% of Kyivstar, a major Ukrainian
cellular operator, to VimpelCom Ltd. (56.5% and 43.5%, respectively). As a
result, Altimo would have 43.9% and Telenor 35.4% of VimpelCom Ltd.'s voting
shares. After the offer has expired, OJSC VimpelCom plans to delist from the
NYSE and RTS, and VimpelCom Ltd. plans to be listed on the NYSE.
The
merger of OJSC VimpelCom and Kyivstar would result in establishing "a major
cellular operator in emerging markets having an increased market share and
further growth perspectives," said an announcement by VimpelCom Ltd. "The merger
will definitely have an economic impact," Alexander Izosimov, VimpelCom Ltd.'s
CEO, told Vedomosti. In particular, according to the company's filings,
VimpelCom Ltd. will profit from the merger of OJSC VimpelCom's and Kyivstar's
operations in Ukraine. In 2010, VimpelCom's Ukrainian subsidiary would save $68
million in operational expenses alone, the VimpelCom - Kyivstar subsidiary would
save $49 million in aggregate capital expenses, and their total tax payments
would be reduced by $23 million. According to VimpelCom Ltd.'s forecast,
prepared by UBS, its consultant, VimpelCom and Kyivstar will invest $2.05
billion in 2010.
But
"most people agree that there will be consolidation in the telecommunication
industry, and our transaction should be viewed from that perspective," says
Izosimov. "The transaction is very important...as a platform for adding value –
to enable the company to be successfully involved in the global consolidation
process when it starts."
Analysts
are advising minority shareholders to accept the offer.
Igor Semenov, an analyst at Deutsche Bank, believes the transaction has a lot of
advantages, and its alternative is a return to the situation of permanent
conflicts between VimpelCom and Kyivstar shareholders which existed in previous
years. He thinks that most minority shareholders will accept the offer: those
who opposed the merger have likely already sold their securities.
Approval
of the offer by 95% majority of shareholders is one of the mandatory conditions
of the transaction, notes Telenor representative Anna Ivanova-Galitsina. But in
accordance with VimpelCom Ltd.'s filings, the term of the offer may be extended.
Altimo representative Evgeniy Dumalkin expects that minority shareholders "will
accurately assess the advantages provided by the offer," and he believes a key
objective to overcoming the 95% threshold is to inform all shareholders of the
offer's advantages as much as possible.
Minority
shareholders may prefer to sell the shares, but VimpelCom Ltd. "strongly urges"
them not to. The securities would be purchased at par value, RUR 0.01
per Russian share and RUR 0.0005 per ADS. VimpelCom Ltd. acknowledges that this
nominal cash consideration does not imply fair market valuation.
An
option on 1.05 million shares of VimpelCom Ltd. may be purchased by Izosimiov if
OJSC VimpelCom and Kyivstar become part of the holding.
OJSC
VimpelCom is a cellular and fixed-line communications provider.
The
shareholders: Altimo (44%), Telenor (29.9%), 24.3% of shares are traded at
NYSE.
Capitalization:
$17.7 billion.
Financial
data (US GAAP, 2008): revenue - $10.117 billion, net income: $524
million.
This
communication is for informational purposes only and does not constitute an
offer to purchase, sell, or exchange or the solicitation of an offer to sell,
purchase, or exchange any securities of OJSC VimpelCom or
VimpelCom Ltd., nor shall there be any offer, solicitation, purchase, sale
or exchange of securities in any jurisdiction in which such offer, solicitation,
purchase, sale or exchange would be unlawful prior to the registration or
qualification under the laws of any such jurisdiction. The publication or
distribution of this communication may, in some countries, be restricted by law
or regulation. Accordingly, persons who come into possession of this document
should inform themselves of and observe these restrictions. To the fullest
extent permitted by applicable law, Altimo Holdings & Investments Ltd.
(“Altimo”), any of its affiliates and all the abovementioned companies disclaim
any responsibility or liability for the violation of such restrictions by any
person.
In
connection with the U.S. Offer by VimpelCom Ltd. to acquire all outstanding
shares of OJSC VimpelCom (including those represented by ADSs), VimpelCom Ltd.
has filed with the SEC a registration statement on Form F-4, which includes a
prospectus and related U.S. Offer acceptance materials to register shares of
VimpelCom Ltd. (including those represented by DRs) to be issued in exchange for
OJSC VimpelCom shares held by U.S. persons and OJSC VimpelCom ADSs held by all
holders, wherever located. In addition, VimpelCom Ltd., Altimo and Telenor (and
certain of their affiliates) have filed a Statement on Schedule TO with the SEC
in respect of the U.S. Offer. Holders of OJSC VimpelCom securities
are urged to carefully read the registration statement (including the
prospectus), and any other documents relating to the U.S. Offer filed with the
SEC, as well as any amendments and supplements to those documents, because they
contain important information. Free copies of the registration statement,
including the prospectus and related U.S. Offer acceptance materials and other
relevant documents filed with the SEC in respect of the U.S. Offer, can be
obtained at the SEC’s website at www.sec.gov. The prospectus and related U.S.
Offer acceptance materials are being mailed to holders of OJSC VimpelCom
securities eligible to participate in the U.S. Offer. Additional copies may be
obtained for free from Innisfree M&A Incorporated, the information agent for
the U.S.
Offer,
at the following telephone numbers: 1-877-800-5190 (for shareholders and ADS
holders) and 1-212-750-5833 (for banks or brokers).
Cautionary
statement regarding forward-looking statements
This
announcement contains “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements are
statements that are not historical facts, including statements concerning the
anticipated timing of filings and approvals relating to the proposed
transactions; the expected timing of the completion of the proposed
transactions; the expected benefits and costs of the proposed transactions;
management plans relating to the proposed transactions; the ability to complete
the proposed transactions in view of the various closing conditions; the
possibility that the proposed transactions may not be completed, any projections
of earnings, revenues, synergies, accretion, margins or other financial items;
any statements of operations, including the execution of integration plans; any
statements of expectation or belief; and any statements of assumptions
underlying any of the foregoing. Any statement in this announcement that
expresses or implies Altimo’s intentions, beliefs, expectations or predictions
(and the assumptions underlying them) is a forward-looking statement.
Forward-looking statements involve inherent risks, uncertainties and
assumptions, including, without limitation, risks related to the timing or
ultimate completion of the proposed transactions; the possibility that expected
benefits may not materialize as expected; that, prior to the completion of the
proposed transactions, OJSC VimpelCom’s business or Kyivstar’s business may not
perform as expected due to uncertainty; that the parties are unable to
successfully implement integration strategies or otherwise realize the synergies
anticipated for the proposed transactions; and other risks and uncertainties
that are beyond the parties’ control. If such risks or uncertainties materialize
or such assumptions prove incorrect, actual results could differ materially from
those expressed or implied by such forward-looking statements and assumptions.
The forward-looking statements contained in this announcement are made as of the
date hereof, and Altimo expressly disclaims any obligation to update or correct
any forward-looking statements made herein due to the occurrence of events after
the issuance of this announcement.
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