MegaFon deal reached

This time the whispers were coming from those in the know as TeliaSonera (OMX: TLSN) has made details of an agreement that was just reached between the three owners of Russia’s second largest mobile operator MegaFon public. Teliasonera, AF Telecom and Altimo have agreed that the company will pay a 5.15 billion USD dividend and pursue an IPO with 20% float in London Stock Exchange as soon as possible. Furthermore MegaFon will have a firm dividend policy going forward.

As expected, Alisher Usmanov’s AF Telecom will be gaining a majority of the company where as Mikhail Fridman’s Altimo will be exiting. TeliaSonera will reduce its holdings to 25% plus one share strategic stake (35.6% pre-IPO) as AF Telecom will be acquiring TeliaSonera’s minority stake in TelecomInvest (8.2% indirect holding in MegaFon is gone this way) and TeliaSonera will contribute a part of the shares into the IPO later on. There is also a clause on the divestment of that 10.6% contribution stake to the IPO in the event an initial public offering hasn't been completed by 2014.

Investors can also take solace in the fact that TeliaSonera and Altimo are able to agree on difficult issues. This should bode well when the two companies focus on entangling another difficult knot, namely the TurkCell ownership issue. TeliaSonera is up over 7% after first hour of trading.