TeliaSonera likely to appeal MegaFon ruling

STOCKHOLM, SWEDEN: Nordic telecoms firm TeliaSonera said it will probably appeal against a Russian court ruling blocking its plan to merge a stake in mobile firm MegaFon with that of Russia's Alfa Group.

The ruling, if it stands, would scupper Telia's attempt to increase its control over one of its key holdings and end its hopes of getting a dividend from cash-rich MegaFon.

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"We expect to appeal," TeliaSonera spokeswoman Cecilia Edstrom told Reuters on Tuesday, adding the company had not yet received details of the ruling.

A spokesman for Alfa Group's telecoms arm Altimo said it was also planning to appeal Monday's ruling.

Telia has been trying to increase control over its diverse empire of telecoms investments, but has run into problems in Russia and Turkey, where it is in dispute with other owners.

In November TeliaSonera said it and oil-to-telecoms group Alfa would combine their holdings in mobile operators MegaFon in Russia and in top Turkish mobile firm Turkcell.

But metals magnate Alisher Usmanov, who owns 39 per cent of MegaFon, filed a suit in April to force TeliaSonera and Alfa Group to scrap their agreement.

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Usmanov has said he favours another route for his MegaFon stake - swapping it for a share in the reformed state telecoms holding company Svyazinvest.

"Very few had assigned a high probability that the deal would happen," said Jan Dworsky, analyst at Handelsbank.

He added that the spat could drag out for a long time and that Telia might be better to reach an agreement with Usmanov to sell its stake in MegaFon and use the money to buy back shares.

"If they (Telia) got an okay price, the market would probably take that positively," he said.

In addition to increasing control over MegaFon, the deal with Alfa Group was aimed at helping solve an ownership spat over Turkcell, Turkey's top mobile firm.