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Russia's Magnit Completes $736m Buyback From Foreign Shareholders

By Reuters
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Russia's Magnit Completes $736m Buyback From Foreign Shareholders

Russian retailer Magnit has purchased an additional block of shares from foreign shareholders, completing a buyback worth around $736 million that has given Western investors a chance to recoup some assets stranded in Russia.

Magnit bought back outstanding shares worth around 48.5 billion RUB ($540.6 million) in September, but held an additional tender offer of 7,899,569 shares, equating to approximately 7.8% of all those issued, to give more investors the opportunity to exit Russian asset holdings.

Western Sanctions

The overall offer represented the first opportunity for non-resident shareholders of a Russian public company to dispose of their shareholdings with settlement in different currencies since sweeping Western sanctions imposed over Moscow's invasion of Ukraine and subsequent Russian countermeasures restricted the flow of capital.

'Over 300 investors from 25 countries participated in the transactions, including long-term active management funds, passive index funds/ETFs, hedge funds, pension and sovereign wealth funds, family offices and individual investors,' Magnit said in a statement.

Magnit Alyans Increases Its Stake

Magnit's wholly-owned subsidiary Magnit Alyans has become the owner of 29.7% of its shares as a result of the deals, Magnit said. Magnit Alyans paid around RUB 66 billion ($735.6 million) for the shares in total, according to Reuters calculations.

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Magnit, Russia's second-largest retailer with more than 28,000 food and home goods stores across Russia and Uzbekistan, purchased all the shares at RUB 2,215 roubles per piece, representing a discount to its Moscow-listed shares, which were trading at around RUB 6,260 per piece on Friday (24 November).

The Kremlin demands a discount of at least 50% on asset sales involving foreigners.

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