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 But even at a hefty 94 percent premium, the bid is likely to meet
stiff resistance from Turkish regulators, analysts said, given
Ankara's opposition to the market leader falling into foreign hands
after a long battle between the Russians and one of Turkcell's
founders.
Alfa has been fighting with its equity partner, Turkcell founder
Mehmet Emin Karamehmet, over control of the operator for nearly a
decade, a tussle that has also prevented some dividends from being
paid.
Last year an international arbitrator ordered Alfa to return the
stake to Karamehmet's holding company for $1.6 billion. Strapped for
cash, Karamehmet's Cukurova Holding financed the purchase with a
loan from state-owned Turkish lender Ziraat Bank [TCZIR.UL] it has
yet to repay.
Now, Alfa has offered to buy the shares -- still held by Ziraat as
collateral. Alfa already indirectly owns 13.22 percent of Turkcell,
meaning the additional 13.76 percent would be enough to gain
control, given Turkcell's complex ownership structure.
The offer would likely be blocked by Turkish regulatory authorities,
analysts said.
"It is therefore highly unlikely, for strategic and national
security reasons, that the government would let the Turkish
controlling shareholder sell its stake to a Russian (or any other
foreign) entity," said Ondrej Cabejsek, an analyst at Czech firm
Wood & Company Financial Services, in a note.
ALFA EXERTS PRESSURE
Alfa could be using its bid to put renewed pressure on Cukurova.
"Alfa, knowing that it is likely never to be allowed by the Turkish
authorities to buy Cukurova's stake, might therefore be trying to
force Cukurova to buy Alfa's stake, and at a hefty premium at that,"
said Cabejsek, who has a "sell" on the stock.
Alfa Telecom said in a statement it had offered $54.9 million per
share for 51 of Turkcell's class-B shares, which represents a 94
percent premium from Monday's close.
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One source with knowledge of the deal told Reuters that either
Cukurova or Ziraat Bank could be looking to buy Alfa's stake and
force the Russians out.
"Ziraat Bank could act like a private equity investor and opt to
take a stake in Turkcell by buying the Alfa shares," said the
person, who declined to be identified.
Turkcell is the dominant mobile operator in Turkey, a nation of 75
million seen as having further growth potential for mobile
operators, particularly in data.
Nordic telecoms group TeliaSonera is the biggest direct stakeholder
with 38.04 percent in the mobile operator, while 27.25 percent of
the shares are publicly traded.
Turkcell's ordinary shares were up 2 percent at 12.8 lira at 1110
GMT, reflecting market scepticism about the proposed Alfa deal going
ahead.
(Additional reporting by Ece Toksabay; Editing by Keith Weir)
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