Russia's Alfa Telecom bids $2.8 billion to double stake in Turkcell
By Asli Kandemir and David Dolan
ISTANBUL (Reuters) - Russia's Alfa Telecom offered $2.8 billion on Tuesday to buy back a 13.8 percent stake in Turkcell TCELL.IS, a move that would give billionaire Mikhail Fridman's group control of Turkey's top mobile operator.
But even at a hefty 94 percent premium, the bid is likely to meet stiff resistance from Turkish regulators, analysts said, given Ankara's opposition to the market leader falling into foreign hands after a long battle between the Russians and one of Turkcell's founders.
Alfa has been fighting with its equity partner, Turkcell founder Mehmet Emin Karamehmet, over control of the operator for nearly a decade, a tussle that has also prevented some dividends from being paid.
Last year an international arbitrator ordered Alfa to return the stake to Karamehmet's holding company for $1.6 billion. Strapped for cash, Karamehmet's Cukurova Holding financed the purchase with a loan from state-owned Turkish lender Ziraat Bank [TCZIR.UL] it has yet to repay.
Now, Alfa has offered to buy the shares -- still held by Ziraat as collateral. Alfa already indirectly owns 13.22 percent of Turkcell, meaning the additional 13.76 percent would be enough to gain control, given Turkcell's complex ownership structure.
The offer would likely be blocked by Turkish regulatory authorities, analysts said.
"It is therefore highly unlikely, for strategic and national security reasons, that the government would let the Turkish controlling shareholder sell its stake to a Russian (or any other foreign) entity," said Ondrej Cabejsek, an analyst at Czech firm Wood & Company Financial Services, in a note.