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Russia's largest mobile communications operator, Mobile TeleSystems (MTS),
Russia's largest mobile communications operator, Mobile TeleSystems (MTS), has made an offer worth about $1 billion to buy the Volga-based mobile operator Smarts, business paper Vedomosti said on Thursday.

The offer was made to the holders of 97% of the mobile operator's shares, except for VolgaTelecom, a minority shareholder in Smarts, Russia's seventh largest cell phone operator in terms of subscribers (4.03 million). The $1 bln offer covers Smarts' debt of $200-250 million and a premium for the company's legal clearance, Vedomosti said.

However, analysts say the deal will probably not be signed in the near future.

Smarts shareholders have been seeking to sell the company for six years now. In December 2007, VimpelCom, Russia's second largest mobile phone company operating under the Beeline brand, made a $750 million offer for the company's entire stock. However, the deal failed as Smarts was registered as a private company and its shareholders first had to offer their stakes to other co-owners.

The purchase of Smarts by VimpelCom would enable the company to become the country's No. 1 cell phone operator.

In the first nine months of 2007, MTS posted revenues of $4.46 billion and VimpelCom $4.39 billion while Smarts earned $240 million, Vedomosti said.


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