VTB chief says "people's IPOs" unjustified - paper
MOSCOW. Oct 4 (Interfax) - VTB bank chief Andrei Kostin said he thought companies and banks should not hold any more so-called "people's" initial public offerings (IPOs).
"In future I'd put an end to the sale of shares in selected companies to members of the public and would concentrate on putting shares in those companies in the hands of specialized entities and funds," Kostin said in an interview with the Kommersant newspaper.
Kostin, whose VTB sold shares to the public in its IPO in 2007, said this practice had "not justified itself." "People are swayed by emotions, advertising, but professionals have a different approach," he told the paper.
VTB's own people's IPO was "a failure," Kostin said. "The direct sale of shares in even Russia's bluest chips to private investors is a highly debatable thing. I don't think private individuals have the sort of expertise or opportunities to make the sort of penetrating analysis that justifies their purchase of share," he said.
VTB sold 22.5% of its shares for 0.136 rubles each and $10.56 per Global Depositary Receipt (GDR) (one GDR represents 2,000 shares) in its IPO in May 2007, raising a total of 206 billion rubles ($8 billion).