Lenta, the hypermarket chain based in Russia that is partly owned by buyout firms TPG Capital of the United States and VTB Capital of Rusia, is discussing with financial institutions as to a possible listing in the public bourse. The said IPO listing is projected to raise at least US$1 billion according to anonymous sources familiar with the deal.
Should this prove successful, this would be one of the first instances of an American private equity firm reaping success in Russa. It would also allow TPG Capital an exit strategy for its investment made last 2009.
Many US hedge funds have avoided investing in Russia due to issues about rampant corruption and the best deals are railroaded to favored oligarchs. TPG, for its part, has not had an easy journey with Lenta, as it only resolved a long running conflict with its founder last 2011.
Should Lenta pursue an initial public offer of its shares, the float would be considered as the largest one to date since the November 2011 IPO of mobile operator MegaFon reportedly earning US$1.7 billion.
The plan has scheduled the sale to be held in the first quarter of next year, according to one source. Another source said it could be as early as the fourth quarter of 2013. Banking sources on the other hand said that the company is said to have an enterprise value of over US$5 billion, thus a 25% share sale could net about US$1.25 billion.
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