OREANDA-NEWS. July 31, 2009. MTS is prepared to pay US1.275bn for a 51% stake in Comstar, which implies US5.98/share (fixed FX-rate of RUB31.97 per US 1), reported the press-centre of OTKRITIE FC.

Comstar received the offer from MTS on 23 June, and Sistema's BoD is expected to approve the final transaction details on 5 August. The offer price is approximately 20% higher than Comstar's last closing price on the LSE.

View: The offer price is on the upper limit of the price range that we expected (US 5.5-6), which is positive. When the final transaction details are approved by Sistema’s BoD, the crucial point of the deal will be whether or not MTS makes an offer to Comstar minorities.

Valuation: MTS trades at 5.1x EV/EBITDA 09E.

Action: Although we do not expect a minority buyout, the high offer price for Sistema's stake is most likely to spur Comstar's shares.