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May 3, 2019 www.intellinews.com I Page 2
Mordashev's Severgroup completes Lenta acquisition despite Magnit bid
industry expertise that Severgroup doesn't have.
Under a binding agreement announced on April 1, Lenta's main shareholders TPG and the Eu- ropean Bank for Reconstruction and Develop- ment (EBRD) were to sell their 34.44% and 7.47% stakes in Lenta respectively to Severgroup for $3.60 per GDR. The total amount of the deal stood at $729mn and the retailer is valued at $1.75mn.
Should all the remaining minority shareholders claim the buyout offer, Severgroup would have to spend an additional $1bn. "Our goal is to bring Lenta to a position of an uncontested leader in the sector in terms of client loyalty and unique proposal," Mordashov commented on the deal
in the press release.
The minority shareholders that called for the Magnit deal to be looked into more closely reportedly included Prosperity Capital, Aberdeen Standard Investments, Bestinver and a group of unnamed private investors.
As traditional retailers are pushing against structural barriers to growth, declining valuations could start a wave of M&As in the sector. Most recent reports claim that another second-tier retailer O'key is reportedly eyed
by Yandex.Market online marketplace, a joint venture between Russia’s largest bank Sberbank and most valuable digital company Yandex.
However, the CEO of Magnit and the former
CEO of Lenta Jan Dunning told Vedomosti daily commenting on the Lenta acquisition on April 30 that more of such large deals that change the
Russian Market Data Value
1M YTD
Equity Indices
RTSI
1,240
1%
17%
MOEX
2,561
3%
8%
MSCI EM
1,077
3%
12%
S&P
2,926
5%
18%
NASDAQ
8,119
6%
23%
DAX
12,283
8%
16%
FTSE
7,434
4%
10%
Commodities
Price, $
1M YTD
Brent
74.3
10%
37%
WTI
65.1
11%
43%
Urals
74.2
-4%
65%
Gold
1,277
-3%
0%
Silver
14.9
-4%
-4%
Nickel
12,265
-4%
16%
Copper
6,375
1%
7%
Aluminum
1,851
0%
-1%
FOREX
Value
Russia sectors performance % YTD
1M YTD
EUR/RUB
71.98
-1%
-9%
Russia sectors performance % YTD
Oil & Gas Utilities Financials Consumers Telecoms M&M RTS MOEX
12
18
19 15
14
16.0
8.0
10
0 5 10 15 20 25
Source: MOEX, BCS GM
source: MOEX, BCS GM
Sectors: % return YTD