MegaFon Denies Interest in Buying VimpelCom Stake

Russia's 3rd largest mobile phone network, MegaFon has denied reports that it is looking to buy a 5% stake in its rival network, Vimpelcom. The company had been reported to have considered the purchase by Russian business daily, Kommersant - but a source told Reuters that the story was not true.

The Russian newspaper had cited two sources close to the company's shareholders as saying that the purchase had been discussed at a recent board meeting.

The Alfa Group, controlled by oligarch Mikhail Fridman owns 25.1% of MegaFon, but also owns 44% of VimpelCom.

TeliaSonera owns 36% of MegaFon, but the largest single shareholder is Telecom-invest together with its Bermuda based sister company IPOC International Growth Fund who jointly own 39% of the company. Although a Danish lawyer, Jeffrey Galmond is named as the beneficiary owner of the 39% stake, it is widely believed that former Minister of Communications and Information Technologies, Leonid Reiman is the actual owner of the stake.

A battle for control of the company is ongoing between Alfa Group and Jeffrey Galmond. A possible move to link Vimpelcom and MegaFon shareholdings could be presumed to benefit the Alfa Group against Jeffrey Galmond's holding companies.

On the web: Reuters

Posted to the site on 3rd July 2009