ALMATY: kazakhtelecom has made a bid to buy Swedish telecoms company Telia’s stake in mobile operator Kcell valuing it at around $600 million, two sources familiar with the talks told Reuters.

kazakhtelecom, Kazakhstan’s largest fixed-line telecommunications operator, has applied for permission to buy a 75 per cent stake in London- and Almaty-listed Kcell, the country’s antitrust committee said last month.

kazakhtelecom which also has a stake in Kcell’s competitor, a joint venture with Tele2, has so far disclosed no details of its bid.

One source familiar with the bidding process said kazakhtelecom’s bid valued Kcell, the Central Asian country’s biggest operator, at around $600 million.

Another source also familiar with the talks said the bid price was about 40 per cent below Kcell’s market capitalisation - which is around $1 billion. kazakhtelecom and Telia declined to comment on the matter.

Kcell’s share price has surged about 47 per cent since last June, prompting analysts to rate it as overvalued.

Russian brokerage Sberbank CIB said in a note last month Kcell was overvalued and had a “sell” recommendation on the shares. VTB Capital, another Russian brokerage, also rates Kcell as “sell”. Under Kazakh corporate law, if kazakhtelecom takes over Kcell, it will have to offer to buy the remaining outstanding shares at the market price.

Reuters