Storing up

14 February 2014 By Quentin Webb

The Russian hypermarket retailer is asking for a $4.1 to $5 bln equity valuation for its London share listing. That implies a lower valuation than sector leader Magnit, which looks apt. Lenta is growing fast but smaller and less established, and the backdrop is tough.

This content is for Subscribers only

To access full Breakingviews.com content you must be a subscriber. Please use the following link to request a trial.

Context News

Lenta, the Russian hypermarket chain, said on Feb. 14 it is seeking an equity valuation of up to $5 billion, as it set a price range for its London market debut. At $9.50 to $11.50 per global depositary receipt (GDR), the price range implies a market capitalisation of $4.09 to $4.95 billion, or an enterprise value of $5.2 billion to $6.1 billion including debt.

The figures are lower than some previous estimates of Lenta’s value. Reuters, citing a financial market source, reported on Feb. 3 that one of the bookrunners valued Lenta’s equity at $5.3 to $6.2 billion. Bloomberg, citing three people familiar with the matter, reported on Feb. 4 that Russian bank VTB, a co-owner of the company and a bookrunner on the deal, valued the company at $5.3 to $6.2 billion, although the newswire did not specify if this was an equity or enterprise value.

Selling shareholders include U.S. private equity firm TPG, which owns a 49.8 percent stake; the European Bank for Reconstruction and Development, with 21.5 percent; and Russian bank VTB, which owns 11.7 percent.

Email a friend

Please complete the form below.

Required fields *