Page 8 - bne_Tech_06_2020

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June 2020 www.intellinews.com I Page 8
Russian Sberbank and Yandex said to split assets in final divorce
Russia's most valuable digital company Yandex and largest state-controlled bank Sberbank plan to complete their divorce by breaking up the Yandex.Market e-commerce marketplace joint venture and Yandex.Money e-payment system, The Bell reported citing unnamed sources close to negotiations.
As reported by bne IntelliNews, in 2019 Yandex struck a corporate governance deal with the Kremlin, calming concerns of a state takeover of the company, but at the price of a fallout in the relationship with another investor darling, Sberbank.
Sberbank gave up its golden share in Yandex and continued to pivot away from the digital major, strengthening its co-operation with its rival Mail. ru in the foodtech and transportation segment, as well as teaming up with Rambler Group on online content, investing in driverless solutions, etc.
The last remaining asset between the two companies is Yandex.Market, and reportedly Yandex intends to acquire 45% in the marketplace (joint venture 45:45, 10% held by management), while selling 25% in Yandex.Money.
Reportedly, the deal would be carried out at “market valuation”, while Sberbank had received a stake in the JV for a RUB30bn ($435mn) contribution at its launch in early 2018.
"More concerns than benefits for Yandex if it acquires Sberbank's 45% stake in Yandex.Market," BCS Global Markets commented on June 3,
warning that the move would consolidate Market’s losses and investment needs on Yandex balance.
Beru, the online marketplace of Yandex.Market, was one of the fastest-growing e-commerce platforms in Russia in 2019, jumping from 52nd place to 9th, with RUB28bn sales soaring by 849%. However, it still remained loss-making on the Ebitda level in 1Q20.
Reportedly, to finance the deal, Yandex could place less than 5% class A shares (BCS GM estimates
it is up to 4% share capital or 15mn shares or $0.6bn at current value). The Bell sources claim that among potential participants of such an
open market SPO could be the VTB Bank and Millhouse investment vehicle of billionaire Roman Abramovich.
For BCS GM, the necessity of an SPO is also unclear, given the RUB167bn cash pile of Yandex (the company boosted its cash position before the crisis with a placement of $1.25bn worth of convertible loans).
The analysts also believe that the possible participation of VTB and Millhouse may concern some investors. BCS GM sees the deal as having minimal impact for Sberbank.
However, on the positive side, a non-compete clause with Sberbank in fintech would be lifted, clearing the road for Yandex in the segment, "though at this point potential benefits are hard to estimate," BCS GM believes.