Page 132 - RusRPTFeb21

Narrower scope and revised financial terms. A previous deal announced in July 2019 was not approved by the FAS and hence broke down. What has changed now? First, the company is buying the call centres and the cargo business, not the app or IP. Vezet customers will still be able to order services by phone as well as through the Yandex Go app. Second, since the scope of the deal has been cut and given Vezet's rides are in a downtrend (we estimate a 20-30% y/y decline), the price has been cut to "up to $178mn in cash, a significant part of, which will be contingent on certain integration milestones" (from "up to 3.6% of the issued share capital of Yandex.Taxi JV at deal closing, together with up to $71.5mn in cash, subject to KPIs"). The deal is now below the threshold requiring FAS approval.
Good deal, should be complementary. We believe the deal will help to strengthen Yandex.Taxi's positions in smaller cities (with a 500k population or less) where ordering taxis over the phone is especially popular. Vezet is very advanced on this front, as its call processing takes an average of 20 seconds, one of the fastest rates in the industry, according to Yandex. We also believe that the deal is quite timely, as the core competitive battleground for the taxi industry is in the regions, and as new players (such as Didi) could be about to enter the fray. We are pleased that Yandex will not have to overpay for the app under the amended deal terms.
Deal adds value. We regard the deal as value-accretive, as the deal size of "up to $178bn" is less than 2% of our fair value for Yandex's ride hailing business, while we think synergies in the regions outside Moscow (which we estimate account for 60-65% of total ride-hailing GMV) could be considerable.
9.2.9 ​Tourism corporate news
Travel group TUI on January 11 said German regulator BaFin has exempted a consortium backed by Russian billionaire Alexey Mordashov from making a compulsory takeover offer for the company​, easing the path for a bailout of the travel operator. In early December TUI secured a multibn-euro bailout with the German government, private investors and banks after the COVID-19 pandemic wiped out its revenue. Mordashov, who is already TUI’s largest shareholder, owning 25% of the company, backed capital measures, which would raise his stake to 36% on the condition that BaFin, the German markets watchdog, exempted him from launching a full takeover. The deal also paves the way for Germany’s economic support fund to take a non-voting stake in the form of a so-called silent participation.
132 ​RUSSIA Country Report​ February 2021 www.intellinews.com