Russia's MTS to buy back foreigners' blocked shares for $29 million

MOSCOW (Reuters) - Russia's largest mobile operator MTS said on Monday it plans to buy back 26.3 million blocked shares from foreign shareholders for 2.5 billion roubles ($29.44 million) as part of a tender offer.

MTS' offer, which means shares would be purchased at no more than 95 roubles per share, mirrors that of retailer Magnit, which completed a discounted buyback worth about $736 million in 2023, the first deal of its kind that allowed Western investors recoup some funds stranded in Russia.

MTS said the offer represented 1.31% of all issued and outstanding shares. The company had originally sought to buy back up to 4.2% of its shares at a discount to its share price of around 70%, with its wholly-owned subsidiary Stream Digital as the buyer.

In Moscow, MTS shares were trading at 289.5 roubles per piece on Monday.

The Kremlin demands a discount of at least 50% on any asset sales involving foreigners. MTS secured approval from Russia's government commission on foreign assets for the deal.

MTS left the door open for additional tender offers and said that the number of shares expected to be purchased was preliminary and subject to settlement.

Stream Digital had invited holders of ordinary shares, including JPMorgan Chase Bank in its role as a depositary bank, to take part, MTS said.

MTS has said that non-residents whose shares are held in special "type-C" accounts, access to which is blocked unless Moscow grants a waiver, were able to participate and that funds could be received in any currency in bank accounts within Russia or abroad.

($1 = 84.9100 roubles)

(Reporting by Alexander Marrow; additional reporting by Maxim Rodionov; Editing by Susan Fenton and Tomasz Janowski)