Tele2 Russia, the Russian subsidiary of the Swedish-based European telecommunications group, has offered to acquire a 97% stake in regional operator SMARTS for $390 million, including $100 million to cover debt.
Based in Samara, SMARTS is a Russian mobile operator with a regional presence that would ideally compliment that of Tele2 Russia, which currently operates in 43 of Russia’s 83 regions.
The information was leaked last week by Vedomosti, a Russian business daily, from undisclosed sources. Tele2 has refused to comment on the news.
According to experts quoted by Vedomosti, the acquisition of SMARTS appears to be a last ditch effort at scale expansion through an acquisition for Tele2 in Russia as there are very few independent regional operators left in the country.
The transaction faces a number of obstacles that make its realization improbable, however, including pending legal matters involving SMARTS and the current shareholder’s likely demand for a higher valuation.