VimpelCom Offers To Buy Ukraine's Kyivstar For $5 Bln (Update1)

MOSCOW, Russia -- OAO VimpelCom, Russia's second- biggest mobile-phone company, offered to buy Ukraine's VAT Kyivstar for $5 billion as it seeks to expand in the former Soviet state.

VimpelCom made the offer for Kyivstar, Ukraine's second- largest mobile-phone company, to owners Telenor ASA and Altimo, the Moscow-based company said in a PRNewswire statement. Telenor, Norway's largest phone company, owns 57 percent of Kyivstar, and Altimo, Alfa Group's telecommunications arms, owns the rest.

Telenor and Alfa, which are also the two largest shareholders in VimpleCom, have been in a dispute over their assets in Russia and Ukraine for the past year. Alfa has sought to merge the two companies, an idea blocked by Telenor because it wouldn't have a controlling stake in the merged company.

VimpelCom has been seeking to expand in Ukraine, the second- largest country in the former Soviet Union, where subscriber growth rates are higher than in Russia. VimpelCom last year bought Ukrainian Radio Systems, a mobile-phone company that owns the WellCom brand.

VimpelCom spokesman Valery Goldin didn't answer his phone when contacted by Bloomberg. Kirill Babayev, a spokesman for Altimo, couldn't immediately comment on the offer. Dag Melgaard, a spokesman for Telenor in Oslo, could not be reached.

Alfa owns about 32 percent of VimpelCom and Oslo-based Telenor has about 26 percent.

Shares of Telenor fell as much as 1.5 krone, or 2.2 percent, to 67.5 kroner, and traded at 68.25 kroner as of 11:33 a.m. in Oslo. VimpelCom shares fell 0.3 percent in New York on Friday to $44.74, valuing the company at $9.2 billion.

Source: Bloomberg