RUSSIA: Moscow analyst says Russian mobile firm MegaFon shares will debut at the low end of expectations in its initial public offering on the London Stock Exchange

Record ID: 862836

  • Title: RUSSIA: Moscow analyst says Russian mobile firm MegaFon shares will debut at the low end of expectations in its initial public offering on the London Stock Exchange
  • Date: 27th November 2012
  • Summary: MOSCOW, RUSSIA (NOVEMBER 27, 2012) (REUTERS) VARIOUS EXTERIORS OF THE KREMLIN (3 SHOTS) MOSCOW, RUSSIA (NOVEMBER 26, 2012) (REUTERS) PEOPLE ENTERING MEGAFON STORE VARIOUS OF MEGAFON STORE INTERIOR, ITEMS FOR SALE VARIOUS OF MEGAFON STAFF WORKING WITH CUSTOMERS MOSCOW, RUSSIA (NOVEMBER 27, 2012) (REUTERS) OTKRITIE CAPITAL OFFICE TELECOMS ANALYST ALEXANDER VENGRANOVICH WORKING AT HIS DESK
  • Embargoed: 12th December 2012 12:00
  • Keywords:
  • Location: Russian Federation
  • City:
  • Country: Russia
  • Topics: Communications,Economy,Technology
  • Reuters ID: LVAB5G5C2RJJP8FGWHTNL695VK3R
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  • Story Text: Russia's No. 2 mobile phone firm MegaFon is likely to price its initial public offering towards the lower end of its expected range and and analyst said on Tuesday (November 27), on the eve of an offering expected to see the company raise under $2 billion.
    MegaFon, controlled by Russia's richest man Alisher Usmanov, is selling global depository receipts in London and Moscow, offering an alternative to New York-listed Russia market players MTS and Vimpelcom Ltd.
    The company set a range of $20-$25, to raise $1.7-2.3 billion and value the firm at $11.2 billion to $14 billion.
    Telecoms analyst from Otkritie Capital Alexander Vengranovich thinks the sale will be successful, with the total valuation of shares close to the bottom of that range.
    "I expect that the price range for the MegaFon IPO will be close to the low end of the range announced before. So that should be somewhere between 20 and 21 dollars per GDR or per local share, so actually that was a result of the quite limited interest of the investors. So there was some interest definitely, mainly from the international funds as the company has good quality name, but main concerns were related to the price level," said Vengranovich.
    Vengranovich said the company and the future of mobile showed promise.
    "The company is in a good shape, everybody understands that it's a quality name. Russian telecoms market and especially mobile telecoms is one of the most stable markets in Russia in comparison to oil and in comparison to other sectors like utilities and metals. So for the next year I would expect that the growth of that segment will continue. Most of that growth will come from data services segment where MegaFon has the strongest position on the Russian market," he said.
    Analysts have previously said that the IPO would only be interesting to investors if priced at a discount to New York-listed Russian rival MTS.
    The offering will be the largest by a Russian company since aluminium firm Rusal floated in Hong Kong in 2010.
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