Telenor: To Offer Fair Price To VimpelCom Minorities

MOSCOW -(Dow Jones)- Norway's Telenor said Friday that if it or Russia's Alfa Group end up buying out each other's stake in Vimpel Communications, minority shareholders will be offered a fair price for their shares.

Under Russian law, when a majority shareholder increases its stake further, it has to make an offer to other shareholders, based on a weighted average price of the stock for several months.

However, Telenor said that the minorities will get better than the minimum demanded by the law.

"Some mechanism will have to be negotiated separately, which will establish a fair market value," said Kjell Morten Johnsen, chairman of Telenor Russia.

Johnsen told Dow Jones Newswires that when one shareholder buys out the other, it is usually at some premium to the market price. "That will also positively influence the price offered to the minority shareholders," he said.

Telenor proposed Monday that Telenor and Alfa - the largest shareholders in VimpelCom - agree a deal allowing one partner to buy out the other. Telenor has applied to Russia's Federal Antimonopoly Service, or FAS, for permission to buy all of VimpelCom.

Telenor envisaged a separation mechanism that would force one of the partners to buy the other out if they remain in dispute. It isn't clear whether such a deal will come to fruition, as Alfa has said it rejects Telenor's proposal that the two agree a separation agreement.

The two companies have been in dispute over VimpelCom's plans to enter the booming Ukrainian mobile market, a row that sparked a battle for control of VimpelCom.

Company Web site: http://www.telenor.com

-By Anna Ivanova-Galitsina, Dow Jones Newswires; +7 495 974 80 55; anna.galitsina@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 24th March 2006