Russian steel magnate Alexey Mordashov has reached a definitive agreement to buy a 41.9% stake, excluding treasury shares, in Russian food retailer Lenta from TPG Group and the European Bank for Reconstruction and Development (EBRD), his firm said on Tuesday.
Mordashov's Severgroup will buy the stake for a total cash consideration of $729 million, it added in a statement.
After completion of the deal, which is subject to an approval by Russia's anti-monopoly regulator, Severgroup will make an offer to all Lenta's shareholders to acquire their stakes at the same price as its deal with TPG and EBRD: $18 per share, or $3.60 per global depository receipt (GDR).
Lenta's GDR closed at $3.38 on Monday.
'Important Transformation'
"We see tremendous value in businesses that improve people's quality of life and we believe there is great potential in retail as an industry which is now going through important transformation to meet the growing demands of consumers," Mordashov said in a statement from Severgroup.
"Widely known as an efficient grocery retailer with one of the highest growth rates in the market, Lenta is a unique asset to unlock this potential in the Russian market," he added.
The purchase is expected to be completed by the end of May.
Severgroup retained Citigroup Global Markets Ltd as its financial advisor in relation to the deal, it said in the statement, adding that it would hold a call for analysts and investors on Wednesday, April 3, at 1300 GMT.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
