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.

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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.

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