Svoboda ready to buy Luna's stake in Lenta for $801 mln; Alfa a potential investor
ST. PETERSBURG. March 5 (Interfax) - The majority shareholders in the Lenta chain of hypermarkets, BVI-registered Svoboda Corp, which is controlled by August Meyer, has made an official offer to purchase the Lenta shares held by Cayman-registered Luna Inc, which is controlled by American TPG and Russia's VTB Capital, Svoboda said in a statement.
Svoboda and the minority shareholders who are close to it control 44.2% of Lenta shares. Purchase of Luna's 30.8% stake, plus an option on an additional 1% of shares Svoboda is to receive, would give them control over slightly more than 76% of Lenta shares, the statement says.
Luna declined to comment on the Svoboda offer.
Svoboda's offer values Lenta at $2.9 billion, or 11.6 times EBITDA, which is expected to total $250 million this year. Lenta has $300 million in debt. Thus, Luna's stake would be worth $800.8 million, the statement says.
Financing for the deal would be provided by a financial investor who has expressed interest in participating, and with bank loans secured with Svoboda property, it says.
A source close to Lenta said Alfa Group could be the financial investor in question.
A top manager at X5 Retail Group, which is part of Alfa-Group, has no information on the possible transaction. "X5 can't answer for the actions of its shareholders," he said.
According to a spokesperson for A1, a division of Alfa-Group that specializes in direct investment in shareholder capital, the company is not taking part in the offer proposed by Meyer. Interfax was unable to receive commentary at CTF Holdings, Alfa Group's corporate center, in regards to the possible transaction.
The offer is valid until 5:00 p.m. Moscow time on March 15. If Luna accepts the offer, the two companies would sign a memorandum of intent giving them eight weeks to conduct due diligence and prepare the transaction documentation.
Lenta has 37 hypermarkets in St. Petersburg, Novosibirsk, Nizhny Novgorod, Krasnodar, Omsk and other Russian cities. It is one of the top ten Russian grocery chains by revenue.
Lenta boosted revenue 27% to 70.6 billion rubles in 2010, Luna reported. Like-for-like sales increased 24% last year.