Usmanov’s MegaFon plans buyback

MOSCOW: Billionaire Alisher Usmanov’s MegaFon PJSC plans spend as much as US$1.26bil buying back its entire free float and delisting from the London Stock Exchange, to take Russia’s second-largest phone carrier private.

MegaFon Investment Cyprus Ltd, a unit of the carrier, would buy up to 129 million shares at US$9.75 apiece by Aug 22, the company said in a statement.

That’s a 21% premium to MegaFon’s close on July 13 in Moscow.

The stock rose as much as 17% on the country’s Micex index to 589.9 rubles (US$9.48) and gained 7.8% in London on Monday.

Russian companies have been pulling back from London’s stock market, hit by falling valuations as investors fret about geographical and corporate governance risks, with sanctions hurting sentiment.

Gold producer Polyus PJSC and supermarket chain Dixy Group PJSC are among other Russian firms that have delisted recently in London, which had previously attracted corporates seeking to be seen as global operators.

MegaFon’s announcement follows speculation that the company would pull its London listing and takes it a step further, as the carrier seeks a change in strategy toward digital investments.

“The proposed delisting reflects the scale of strategic change we need to make in order to complete MegaFon’s transformation into a leader of the Russian digital market,” MegaFon executive director Gevork Vermishyan said in the statement.