By Beth Mellor and Laura Cochrane
Estonian equities gained the most in 11 1/2 years and Lithuanian shares jumped, posting the biggest moves among stock markets worldwide, after Sweden’s TeliaSonera AB offered to buy out shareholders of its units in the Baltic countries.
Estonia’s OMX Tallinn Index climbed 13 percent to close at 382.12 in Tallinn, its biggest gain since Feb. 25, 1998. The benchmark was lifted by a surge in TeliaSonera’s AS Eesti Telekom, which accounts for almost half of the measure’s weighting. Lithuania’s key equities gauge, the OMX Vilnius Index, jumped 12 percent to close at 248.29, its steepest climb since October.
Tallinn-based Eesti soared 23 percent to 5.88 euros after TeliaSonera, Sweden’s largest telephone company, offered to pay 93 kroons (5.94 euros) a share for the almost 40 percent of Eesti it doesn’t already own. Today’s increase was the steepest since the formerly state-owned Estonian company began selling shares to the public in February 1999.
AB TEO LT added 30 percent to 1.82 litas, also the steepest gain on record, after TeliaSonera offered 1.83 litas for each share of the 40 percent of the company it doesn’t own. TEO makes up 26 percent of the 32-member index by weighting.
“The offer for Eesti Telekom was about 24 percent above market price and the offer for TEO about 30.7 percent above market price,” said Marko Daljajev, an analyst at SwedBank in Tallinn. “This the key factor driving up the stocks,” he said.
Stocks in Estonia have gained 39 percent this year, while Lithuanian equities have added 36 percent. Both Baltic indexes plunged more than 60 percent in 2008. Lithuania’s economy contracted 22.4 percent in the second quarter while Estonia’s shrank 16.6 percent in the same period, government data show.
Minority Shareholders
TeliaSonera, based in Stockholm, entered the Baltic countries in 1991 and has said it aims to take control of subsidiaries in the region.
“The question now is how the main minority shareholders will react to the news,” said Daljajev. Danske Bank A/S, a shareholder in both target companies, rejected the offers as too low.
Estonia’s AS Baltika, the third-largest Baltic clothing retailer, advanced 14 percent, its biggest gain since March, while building company AS Nordecon International climbed 12 percent.
To contact the reporter on this story: Beth Mellor in London at [email protected]
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