20 Oct 2009 18:59

Magnit to begin SPO meetings with investors on Wed

MOSCOW. Oct 20 (Interfax) - Russian retail chain Magnit plans to begin meeting with investors in the runup to a secondary public offering of shares (SPO) on Wednesday, October 21, a source on the market told Interfax.

"The organizers are conducting a breakfast for investors in the runup to the SPO," the source said.

"We received an invitation to a meeting from VTB Capital , but without an indication of the company concerned. We think it was Magnit. It is not named in the invitation, because the marketing hasn't begun yet," another source told Interfax.

If Magnit manages to place the entire supplementary issue of shares, it could potentially raise $800 million.

"The company continues to grow very quickly. Now Magnit is trying to utilize that momentum. During crisis times, people buy less expensive products. Magnit is capturing market share in many ways due to its small chains and separate grocery stores. Discounters are growing quickly right now. Magnit has big plans to open new stores. If they raise that much money, it will all be invested in expansion," he said.

Earlier on Tuesday the board of directors of Magnit approved an agreement to engage Morgan Stanley and VTB Capital as financial consultants for the share placement.

The board of directors approved the placement of supplementary shares at a meeting on September 3. Plans are to sell 11.154 million ordinary shares in an open placement.

Magnit charter capital totals 832,456 rubles split into 83.246 million shares. Thus, the placement would boost charter capital by at most 13.4%.

RTS$#&: MGNT, VTBR