DST to raise stake in Facebook with purchase of shares from cofounder
MOSCOW. Feb 10 (Interfax) - The funds of DST, created by Russian businessmen Yury Milner, Alisher Usmanov and their partners, have reached an agreement with one of the founders of Facebook, Eduardo Saverin to purchase some of his shares in the social network.
Facebook documents do not specify the number of shares that DST will buy from Saverin.
As a result of the deal, DST's stake, which is now about 8.2% including both A and B class shares, will exceed the threshold agreed upon with Facebook. DST has therefore agreed to convert some of its 7.25 million class B shares (which have 10 votes) into class A shares (one vote).
Facebook said in the prospectus for its IPO that the DST funds own 5.5% of voting shares in the company. DST Global Ltd., DST Global II, DST Global III and DST USA Ltd. own 36,711,928 class A shares with the right of a single vote (31.4% of these type of shares) and 94,567,945 class B shares, each of which has 10 votes (5.4% of the total number of shares).
Mail.ru Group Ltd., the owners of which include Usmanov and Milner, owns 2.3% of voting shares in Facebook (44,037,540 class B shares). The company bought this stake in May 2009 for $200 million, or $4.54 per share.
The stakes of Mail.ru and DST, under a special shareholder agreement, are considered to be not affiliated with one another.
Mail.ru and DST are among the investors whose rights to participate in the management of Facebook are limited. The companies entered into agreements under which the right to vote their shares is held by the social network's founder Mark Zuckerberg. The agreement also bars Mail.ru and DST from acquiring Facebook assets, nominating candidates to the board of directors and forming a group with other shareholders.
Facebook has not yet announced the parameters of its IPO and has not said how many shares will be offered. The company has indicated in its prospectus that it wants to raise $5 billion, but financial market sources expect the IPO to be at least $10 billion.
The company is expected to be valued at $75 billion-$100 billion. Based on this valuation, DST's stake would be worth up to $5.5 billion and Mail.ru's $2.3 billion.
The company would list its class A shares. The class B shares may be converted into shares of this type.
The shares of Mail.ru and DST Global, other than those that might be placed in the IPO, fall under a lock-up - half of the stake cannot be sold within six months, another 25% within a year and the remaining 25% within 18 months.
DST is Facebook's fourth largest shareholder. Founder Mark Zuckerberg is the largest shareholder with 28.2% of voting shares (533,801,850 class B shares). The funds of Accel Partners own 11.4% of voting shares (201,378,349 class B shares), Dustin Moskovitz owns 7.6%, and Peter Thiel owns 2.5%.
The largest packet of class A shares is owned by Goldman Sachs (65,947,241). Top management and board directors (12 people) together own 42,245,203 class A shares. Investment fund T. Rowe Price Associates owns 6,033,630 class A shares and 12,158,743 class B shares.
Facebook has appointed Morgan Stanley, JP Morgan and Goldman Sachs to manage the IPO. The co-organizers are BofA Merrill Lynch, Barclays Capital and Allen & Company.
