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Altimo says committed to independents after Wind deal
Altimo and its opposing partner Norway's Telenor are stepping up a fight for minorities' votes ahead of a crucial March 17 meeting.
March 7, 2011 10:20 by Reuters
Russia’s Altimo said on Sunday it wanted independent directors to stay in Vimpelcom’s board and played down corporate governance concerns after a $6 billion planned purchase of Wind Telecom.
Altimo and its opposing partner Norway’s Telenor , the two key Vimpelcom shareholders, are stepping up a fight for minorities’ votes ahead of a crucial March 17 meeting which will decide whether the deal will go ahead.
Telenor faces an uphill battle to convince independent Vimpelcom shareholders to reject the acquisition of control in Cairo-based Orascom Telecom and Wind of Italy from Egyptian tycoon Naguib Sawiris.
The bid is backed by Altimo and all of Vimpelcom’s independent directors.
With 36 percent of Vimpelcom’s voting stock, Telenor has said the purchase of Wind makes no strategic or financial sense and has this week referred to the recommendations of shareholder advisory group ISS.
Telenor’s head of mergers and acquisitions Torbjoern Wist told Reuters that ISS recommended a vote against, largely because the deal would undermine Vimpelcom’s corporate governance structure, reducing independent directors’ representation on Vimpelcom’s board.
But in a statement, Altimo said it was committed to keeping independent directors on Vimpelcom’s board once the transaction was completed.
“Altimo believes that the leading role of the three independent directors on Vimpelcom’s supervisory board is a significant component of Vimpelcom’s success,” it said.
The statement said the presence of independent directors in the board was part of the shareholders’ agreement which will not be affected by the Wind deal.
“If, however, for other reasons the shareholders’ agreement were to be cancelled in the future, Altimo will insist that the three independent directors continue to play their role in disabling the key shareholders’ veto over strategic decisions,” Altimo said.
In Cairo, Naguib Sawaris’s office Weather Investments II, which owns the majority of Wind Telecom, said in an emailed statement that it concurred with Altimo.
“As a possible future significant minority shareholder, Weather Investments II firmly believes that the newly combined entity should adhere to international best practices in corporate governance, including providing for an important role for the three independent directors on the VimpelCom supervisory board,” the statement said.
It said the independent directors played a significant role in “disabling the key shareholders’ veto in relation to strategic decisions.”
(Reporting by Maria Kiselyova, with additional reporting by Patrick Werr in Cairo; Editing by Jon Loades-Carter)