LATVIA - TeliaSonera challenges Blackstone's Lattelecom bid

TeleSonera, which owns 49% of both Lattelecom and mobile telephone group LMT (Latvijas Mobilais Telefons SIA) has announced that it will offer to buy the Latvian Government out of both the country’s main telecoms groups for about $1bn. The government has previously rejected TeliaSonera owning both companies as it would give it three-quarters of the Latvian telecom market.

Both Blackstone and TeliaSonera each submitted new proposals yesterday at a three-way meeting with the Latvian Prime Minister. According to today’s press reports Blackstone repeated its offer to acquire TeliaSonera’s 49% stake in Lattelecom, but said they were now prepared to wait to buy the Government’s 51% stake. The American GP also proposed to run the telecom business as a joint venture with the Government for up to three years, after which time either side will have the right to buy the other out. The Government is due to make a decision at the end of the month.

In July last year, the previous government agreed to buyback 49% of Lattelekom from TeleSonera and sell the entire group to the management. Blackstone led a consortium of investors that announced the $575m MBO of the group. In September, the previous government also approved the financing package of EUR 395m that was assembled by a constellation of banks including: Unicredit, Nordea, Parex Bank and DnB Nor.

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