Russia’s Alfa Telecom bids $2.8 billion to double stake in Turkcell

MOSCOW

Russia’s Alfa Telecom offered $2.8 billion (2 billion pounds) on March 17 to buy back a 13.76 percent stake of Turkcell, a deal that would double its holding in Turkey’s top mobile operator after a seven-year battle for control of the company.

Alfa Telecom said in a statement it had offered $54.9 million per share for 51 of Turkcell’s class-B shares, which are being held with Turkey’s state-run Ziraat Bank as collateral for a loan.

Alfa has been locked in a battle with one of Turkcell’s founder’s, Mehmet Emin Karamehmet, for control of the mobile operator.

Last year, a holding company controlled by Karamehmet, Çukurova, paid Alfa $1.6 billion for the stake in Turkcell, financing its offer through a loan from Ziraat.

But now, Alfa has offered to buy that back at a substantial premium.

One source with knowledge of the deal told Reuters that either Çukurova or Ziraat Bank could be looking to buy Alfa’s stake and force the Russians out.

“Ziraat Bank could act like a private equity investor and opt to take a stake in Turkcell by buying the Alfa shares,” said the person, who declined to be identified.

Turkcell is the dominant mobile operator in Turkey, a nation of 75 million seen as having further growth potential for mobile operators, particularly in data.

Turkcell has a complicated ownership structure, with 51 percent of its shares held by another holding company, Turkcell Holding. Alfa currently holds a 13.22 percent stake in Turkcell through ownership in that unit.

Nordic telecoms group TeliaSonera  is the biggest stakeholder with 38.04 percent in the mobile operator, while 27.25 percent of the shares are publicly traded.