Vladimir Yevtushenkov's conglomerate Sistema said Tuesday that it hoped to bid for control of Svyazinvest after getting a lower-than-expected valuation on its stake of 25 percent plus one share in the telecoms giant that it had wanted to sell to the state.

Sistema proposed in October that the government buy back the blocking stake for $1.9 billion, which is well above the $1.3 billion it paid in December 2006.

Sources said last week that the stake, which is held by Sistema's unit Comstar, had been valued at about $668 million. Kommersant reported Tuesday that the market capitalization of all of Svyazinvest's units was $8.2 billion.

"Comstar is going to file a proposal to the government to buy another 25 percent of Svyazinvest based on a valuation made by Ernst & Young," Sistema spokeswoman Yulia Belous said.

"In our opinion, this valuation was made based on very conservative forecasts for Svyazinvest's development. We believe that we can present ourselves to the state as a more efficient manager [of Svyazinvest]."

Comstar spokeswoman Yekaterina Nevskaya said the unit would be interested in increasing its Svyazinvest stake to a controlling one "at an attractive price."

Vedomosti reported Tuesday that Comstar would offer 20 billion rubles ($590 million) for the stake, citing a draft letter to the Federal Property Management Agency that was prepared by Comstar.

Yelena Lashkina, a spokeswoman for the Communications and Press Ministry, said the government had no intention of selling its shares. The government is mapping out another restructuring plan for Svyazinvest, whose privatization has been delayed by nearly a decade.

(Reuters, Bloomberg, MT)