Wednesday, May 22, 2013

(This story was originally published Tuesday.)

By Reem Abdellatif and Olga Razumovskaya

CAIRO- (Zawya Dow Jones) Talks between Russian telecommunications company VimpelCom Ltd. (VIP) and the Algerian government regarding the government's potential purchase of Algeria's biggest mobile operator Djezzy have ended in failure, two officials close to the matter told Dow Jones Newswires.

One official said the talks were halted after the two sides met in Paris two weeks ago to discuss VimpelCom's sale of a majority stake in Djezzy, which is part of VimpelCom-controlled Orascom Telecom Holding SAE (ORTE.CI).

The acquisition talks had been ongoing for over a year as the Algerian government sought to gain control over telecom assets it regards as being in the national strategic interest

"VimpelCom presented 10 points regarding a new shareholders agreement on Djezzy and all of the points were rejected by the Algerian side," the official said. After the Paris meetings, the Algerian government stopped any further communication with VimpelCom, that person added.

VimpelCom tried to contact the Algerian government last week, but received no response, the official added.

Officials from Djezzy and the Algerian government weren't immediately available for comment.

VimpelCom, Russia's third largest telecom operator by revenue after Mobile TeleSystems and MegaFon and the seventh largest telecom company globally, controls Egypt's Orascom Telecom, Djezzy's owner. Djezzy is Orascom's largest revenue generator in the Middle East.

Last month Baskindale Ltd, a wholly owned unit of Altimo Holdings, and Investments Ltd, a unit of Russian billionaire Mikhail Fridman's Alfa Group, launched a bid to buy Orascom from VimpelCom and its other shareholders at 70 cents a share. Altimo also owns 47.85% of VimpelCom.

Orascom advised its shareholders last week to reject the offer, which it considers too low. It said independent financial advisory firm HC Securities and Investments values Orascom at 86 cents a share.

-Write to Reem Abdallatif at reem.abdallatif@dowjones.com 

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22-05-13 0346GMT