Emerging Markets
by InsideTrade Staff on April 13, 2017

VimpelCom Ltd (ADR) (NASDAQ:VIP) and CK Hutchison Holdings Ltd can invoke a buy-sell option on the stakes

VimpelCom Ltd (ADR) (NASDAQ:VIP) and CK Hutchison Holdings Ltd can invoke a buy-sell option on the stakes they hold in the joint venture that merges their Italian units from three years after the deal’s conclusion, a Vimpelcom presentation showed.

 

 

Earlier this month, the EU gave its greenlight to the 21.8 billion euro ($24.56 billion) deal combining Hutchison’s 3 Italia with VimpelCom’s Wind, putting them in a better position to compete with rivals Telecom Italia and Vodafone Italia, part of Vodafone Group.

“After three years post-completion, each shareholder can invoke a buy-sell mechanism at any time,” the slide said.

One source close to the matter said the option would be used in case the parties reach a deadlock in terms of decision making.

According to the document, the deal’s completion is expected by the fourth quarter of this year. Vimpelcom and CK Hutchison will each own 50 percent of the HoldCo, which in turn combines the operations of Wind and 3 Italia. Vimpelcom and CK Hutchison could not immediately be reached for comment.

VimpelCom Equity Analysis

VimpelCom Ltd (ADR) (NASDAQ:VIP) opened trading today as $3.62 and is trading in the range of 3.32-3.68 today. VimpelCom’s current market cap stands at $6.32 billion.

VimpelCom is currently covered by 13 Wall Street analysts.  The mean target price is $5.33 according to First Call.  This presents a solid upside to the current price of the equity.  The Mean Recommendation sits at 2.1 which is based on 3 Strong Buy, 6 Buy and 4 Hold ratings.

The most recent analyst actions consisted of Citigroup downgrading the stock on April 8th.

The current quarter EPS revenue estimates of 2.02B.  Sales are expected to drop at a -42.40% rate.  VimpelCom reported actual earnings last quarter of 0.07 which fails to beat the .13 consensus estimate, a -46.20% surprise.

Corporate Profile

VimpelCom Ltd., a telecommunications service operator, provides voice and data services through a range of traditional and broadband mobile and fixed technologies. It operates in five segments: Russia, Italy, Africa & Asia, Ukraine, and the Commonwealth of Independent States. The company offers mobile telecommunications services under contract and prepaid plans for corporate and consumer segments; value added and call completion services; national and international roaming services; wireless Internet access; and other services. It also provides fixed-line voice, data, and Internet services to corporations, operators, and consumers, as well as sells equipment and accessories. The company provides its services under the Beeline, Kyivstar, Wind, Infostrada, Mobilink, Leo, banglalink, Telecel, and Djezzy brands. VimpelCom Ltd. was founded in 1992 and is headquartered in Amsterdam, the Netherlands.

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