Alfa Group confirms talks on CTC media exit
IIn a disclosure for the U.S. Securities and Exchange commission Alfa-Group indicated it was in talks to sell its entire stake to MTG which has about a 38% stake in the Russian TV station operator. The statement said that Alfa Group is ready to sell 39,548,896 shares at $27 per share, or an 18% premium to the Wednesday closing price. The value of the packet has been put at $1 billion.
MTG has until 25 March to respond to Alfa Groups proposal. Alfa has also indicated it is in talks with Russia’s National Media group.
UniCredit securities analyst, Vladimir Kuznetsov, said Alfa group is likely to change its investment focus and the MTG is likely to pass up on the chance due to foreign investment regulation considerations, with a possible net beneficiary becoming Russia’s National Media group.
“It is unlikely that MTG will acquire Alfa-Group's stake since Russian legislation restricts the stake held by foreign investors in television companies at 50%. Therefore, the 25% stake in CTC will likely go to NMG. In case, if both Russian and International Media companies decide to buy the stake it is less favorable that the stake will be broken into parts where both companies acquire less than 25%/ National Media Group controls a significant share of the Russian media market and this purchase will increase its brand portfolio and provide consolidation. Apparently, Alfa group is looking to diversify and avoid political and geographical risks.”