Reuters: Mergers News: UPDATE 1-Algeria says no price set for Vimpelcom Djezzy unit

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UPDATE 1-Algeria says no price set for Vimpelcom Djezzy unit Mar 29th 2012, 11:03 Thu Mar 29, 2012 7:03am EDT By Hamid Ould Ahmed ALGIERS, March 29 (Reuters) - No price had been agreed for Algeria's planned purchase of 51 percent of Vimpelcom's Algerian mobile phone unit Djezzy, the country's finance minister said, adding talks could take months. The comment came a day after a senior finance ministry source told Reuters Algeria would pay $6.5 billion to acquire a controlling stake in Djezzy, pushing up the New York-traded shares of Vimpelcom. "We are still in negotiations. Negotiations are ongoing. Until now the price has not been specified," Karim Djoudi told reporters after a parliament session on Thursday . "We will work in these negotiations to set the real value." Analysts immediately cast doubt on a figure they said far exceeded market expectations, adding the number most likely referred to the agreed value of Djezzy as a whole rather than the price Algeria might pay for 51 percent. "We would have expected $6.5 billion for the whole asset not 51 percent. We were expecting $4.5-6.5 billion" Nadine Ghobrial, associate vice president of equity research at EFG-Hermes in Cairo, told Reuters. "I do not think this figure makes sense. I think everyone is surprised." Russia-focused Vimpelcom acquired Djezzy last year as part of a $6 billion deal to buy assets of Egyptian firm Orascom Telecom, but the transaction immediately became clouded in uncertainty after the Algerian government said it wanted a majority stake in the unit. Djezzy was the most lucrative part of Orascom's business, but negotiations to buy the firm have dragged on for over a year. Vimpelcom agreed in January to sell Algeria a 51 percent stake in the unit. It said at the time it had signed a Memorandum of Understanding with the Algerian government to explore the sale, subject to an acceptable price. Algeria's finance minister said earlier this month Algeria had received a valuation for Djezzy, but did not give a number. Contacted by Reuters on Wednesday for comment over the $6.5 billion figure, Vimpelcom spokesman Bobby Leach would not comment. The Algerian finance minister said no deadline had been set to reach a deal on Djezzy. "There is not any timeline to complete the negotiations and reach an agreement on price. This could happen in two weeks or two months, or maybe even months," Djoudi said. Link this Share this Digg this Email Reprints

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