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Deutsche Telekom sold its remaining stake in Mobile TeleSystems, the Russian telecoms group, on Monday, raising about €1.3bn ($1.6bn) and bringing its foray into the Russian market to an end.
The German operator sold 200.5m shares, accounting for 10.1 per cent of the share capital of MTS, making it the biggest share placement in the Russian market to date.
Deutsche Telekom originally held a 40 per cent stake in MTS but has gradually reduced its holding in the past two years.
Monday’s sale was widely expected by the market, after Kai-Uwe Ricke, Deutsche Telekom chief executive officer, labelled MTS a financial stake rather than a strategic one as the company focused on expanding in Europe and the US.
Sistema, the Russian consumer industries conglomerate that controls MTS with a 50.5 per cent stake, had the right to buy the shares before they were offered on the open market. However, the company opted not to participate in the sale.
“We negotiated with Deutsche Telekom, but decided not to buy the shares as we are focusing on other strategic options at the moment,” said Andre Bliznyuk, head of capital markets at Sistema.
Moscow-based MTS has 48.3m customers and subsidiaries in Ukraine, Uzbekistan, Turkmenistan and Belarus.
The company is listed in Moscow and New York, but because its Amerian Depositary Receipts already accounted for close to 40 per cent of outstanding share capital – the maximum allowed by Russian regulations – all the shares were placed in the local market.
The order books closed on Monday afternoon and the shares were expected to be priced at a discount of less than 5 per cent to the closing price on Friday, indicating a price of about Rbs205-Rbs210.
Deutsche Bank and UBS were joint bookrunners in the sale.