* Says deal "excellent result" for shareholders
* Completion comes despite rival offers
* Shareholders largely relieved at Russia exit
STOCKHOLM, April 4 Nordic telecom operator Tele2 said on Thursday it had completed the sale of its Russian business to state-controlled bank VTB, effectively ending the hopes of rival bidders of overturning the deal.
Tele2 struck a $3.5 billion deal last week to sell the assets to VTB and carried it out in a rapid sale process though it was topped by two alternative offers, both linked to Russian billionaire Mikhail Fridman.
Tele2 Chairman Mike Parton said in a statement on Thursday the completion of the deal was an "excellent result" for the company's shareholders.
"Our cash investment in this business was 6 billion Swedish crowns ($915 million) and this has generated a cash return of over SEK 27 billion including the transaction, much of which has been returned to our shareholders," Parton said.
Russia's number one mobile operator MTS and number three player Vimpelcom - part owned by billionaire Mikhail Fridman - offered $4.0-4.25 billion for Tele2 Russia.
Fridman's investment company A1 offered $3.6-$4 billion and has threatened legal action against Tele2 and its adviser Morgan Stanley.
They have said Tele2 shareholders have gotten a raw deal.
However, the lowest priced offer was backed by Tele2's main shareholder, Swedish investment firm Kinnevik, which controls around 47 percent of the voting rights and 30.5 percent of the shares in Tele2.
Other shareholders have also cautiously welcomed a clean break from a market where foreign firms like BP and Nordic peer Telenor have faced issues with authorities and local partners.
"Did they have a choice?" said one of Tele2's institutional shareholders, who declined to be identified.
A fund manager who sold his stake in Tele2 earlier this year over concerns about the future of its Russian business, said the company had had limited options.
"It's that the politicians wanted this deal, so it was not so much a case of looking for the company that pays the highest price, but that you get approval," he said.
"And they got approval within a week, so that tells you something."
Tele2 has been tight lipped about the deal since it was announced last week. It waited several days before revealing it had a claw-back option that meant it would get half the profit if VTB sold the asset within a year.
CEO Mats Granryd has rejected any criticism the company had let shareholders down by taking a lower bid than those from Fridman's A1 group and that of MTS and Vimpelcom.
The company had thoroughly considered its options during an 18 month strategic review of the Russian operations which he said Tele2 had developed as far as it could.
"It sort of boiled down to the complexity of finding a decent exit mechanism and a guarantee that it would actually provide good value for our shareholders," he said on a call with analysts this week.
"That is exactly what we have done with the VTB avenue."
He said that no other cash bids had been placed before Tele2 agreed to exclusive discussions with VTB in late February.
MTS, Vimpelcom and A1 all declined to comment on the news of Tele2's completion of the deal with VTB.
MTS has said it has had contact with several shareholders in Tele2 who are angry the company ignored higher offers from rivals.
No shareholder has publicly criticised the VTB deal.
It remains unclear what VTB plans to do with Tele2 Russia. It could split and sell the assets to the top players, including number 3, Megafon. Some analysts have speculated that VTB could just be parking Tele2 Russia until state-controlled Rostelecom is in a position to buy.
Others have mentioned little-known Osnova Telecom as another possible buyer.
"I can't tell you what will happen now - it's Russia," said one banker close to the deal.