Page 8 - bne_Tech_10_2020

Leaders
October 2020 www.intellinews.com I Page 8
Tinkov was diagnosed with leukaemia it was announced in March and has been stepping back from the day to day operations of many of his companies.
BCS Global Markets commented on October 16 that some investors were optimistic on the deal, and warned that Yandex shares could come under short-term pressure.
Still, the analysts at BCS GM note that "the synergies from the deal were not a given, as well as the deal itself," so the development is seen neutral for Yandex and TCS (Hold recommendation for both names).
As far as TCS is concerned, while BCS GM
was "inspired by possible deal", the analysts acknowledge strong TCS standalone potential
of building up the business further. The banking group is expected to deliver strong 3Q20 results, while unconfirmed reports suggested that TCS is looking for another buyer apart from Yandex.
Analysts at VTB Capital (VTBC) took the same line, saying it was a shame the deal would not go ahead but that both companies are strong and both have considerable potential to continue growing their own businesses separately.
“While we believed that this potential deal might have implied some optionality value for Yandex, we never built any valuation impact into our model, given the uncertainties and risks. Therefore, we take the announcement as neutral,: Vladimir Bespalov, an equities analyst with VTBC said in
a note emailed to clients. “We remain positive on Yandex, with our 12¬month Target Price of $75 implying an ETR of 23%. We also tend to view any
potential decline in Yandex's stock on the back of the potential deal being terminated as an opportunity.”
Yandex will continue to look for fintech opportunities as Russia’s new economy has reached a critical mass and the leading
companies are currently in the process of expanding and building up entire ecosystems through a string of acquisitions and investments. Yandex is battling it out with the other industry leaders Sberbank (now known simply as “Sber”) and Ozon, e-commerce player and online market place that plans to IPO in New York later this year.
“In our view, Yandex will continue to look into the development of Fintech, with potential options including other M&A deals, hiring Fintech professionals to develop expertise internally, and entering into partnerships with existing market players. Yandex might also seek to deploy the capital, which was initially earmarked for the deal with TCS Group in order to grow its business more aggressively in the areas of its core expertise. Overall, we still see Yandex's long-term prospects as attractive, which supports our positive view on the stock,” Bespalov said.
Notably, as covered by bne IntelliNews, Yandex
is venturing into the financial services terrain, stepping up the competition with the Sber ecosystem of its former ally state-controlled bank Sberbank. Thus, on Yandex side another large potential acquisition in the fintech sector is also possible in the nearest future.
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