The long-running battle for control of Turkcell entered a new phase on Tuesday, after Russia’s Alfa Telecom launched a US$2.8 billion bid for a 13.76% stake in the operator.
Reuters reports that Alfa has offered $54.9 million per share for 51 of Turkcell’s class B shares. The shares are currently held by Turkey’s state-owned Ziraat Bank as collateral for a $1.6 billion loan that it gave to Turkish conglomerate Cukurova Holding.
The ownership dispute centres on a loan that Alfa made to Cukurova a decade ago. Cukurova defaulted on a $1.35 billion payment in 2007 and Alfa seized the 13.76% stake in Turkcell that the conglomerate was using as collateral.
However, following a long-running court battle, the U.K. Privy Council in 2013 ruled that Cukurova could take back its stake at a cost of $1.56 billion. The terms of the deal were agreed in July 2014; Ziraat provided funds to Cukurova, which again used the Turkcell shares as collateral. The case was heard in the U.K. because Cukurova is based in the British Virgin Islands.
Now Alfa has offered a substantial premium to re-acquire the shares, which would more than double its holding in Turkcell. It currently owns 13.22% of the operator via Turkcell Holding, which owns 51% of the company.
