Tele2 has released a statement backing financial group VTB as the preferred buyer for its Russian subsidiary.

The Sweden-based operator announced last Thursday that it had entered into a deal with VTB comprising a cash transaction of €1.9 billion in equity and €900 million in net debt.

However, rivals A1, MTS and Vimpelcom tabled counter bids late on Thursday.

A1, part of Russian private investment group Alfa, said it was “fully convinced” that Tele2 Russia is worth more than what VTB is offering.

In a statement signed by MD Dmitry Vozianov, A1 said it would offer an enterprise value of between €2.8-3.1 billion and it had immediate access to funds.

As part of a joint offer, MTS and Vimpelcom went further, promising between €3.1-3.3 billion – a premium of up to 30 percent.

Andrei Dubovskov, president and CEO of MTS, and Jo Lunder, CEO of VimpelCom, said in a letter that their offer created “vastly superior value”.

They added: “Neither MTS nor VimpelCom were permitted to meet with Tele2 AB financial advisors or management to discuss the potential acquisition, which is why we have sent the letter to the Board of Directors and management of the company.”

However, both bids appear long shots.

Tele2 said it has entered into “a legally binding, definitive agreement” with VTB.

The statement went on: “The Board of Directors' decision to enter into this transaction was based on its experience in owning and successfully developing Tele2 Russia over many years, and a full awareness of all strategic options available to Tele2 with respect to its Russian business.”

It added that it expected the transaction to close “shortly”.

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