Bloomberg News

TPG-Backed Retailer Lenta Said to Pick Five Banks for London IPO

June 13, 2013

Lenta LLC, a Russian hypermarket chain controlled by U.S. fund TPG Capital, picked five banks to manage initial public offering of shares in London, said two people familiar with the matter.

Lenta selected JPMorgan Chase & Co. (JPM:US), Credit Suisse Group AG (CSGN), VTB Capital, Deutsche Bank AG (DBK) and UBS AG (UBSN) to manage the sale, said the people who asked not to be identified because the information is private. Yana Mogileva, a Lenta spokesman in St. Petersburg, and Vladimir Melnikov, a TPG spokesman, declined to comment.

The retailer may be worth more than $5 billion in an IPO, according to Marat Ibragimov, an analyst at Moscow-based UralSib Capital. It will enjoy “higher multiples” than Russian hypermarket operator O’Key Group SA, (OKEY) which has slower growth and owns a smaller proportion of its stores, Ibragimov said.

Lenta may be seeking to raise about $1.5 billion in an IPO, Sky News reported last month, without citing sources. This could be among the largest IPOs of Russian retailers. O’Key’s IPO raised $428 million in 2010; and OAO Magnit, Russia’s largest retailer, sold $571 million of additional shares in 2011.

Lenta’s revenue rose 22 percent last year to 110 billion rubles ($3.4 billion). The retailer had a margin on earnings before interest, taxes, depreciation and amortization of 11.6 percent, higher than the 10.6 percent Ebitda margin of Magnit, according to a bonds presentation in February.

Kate Haywood, a JPMorgan spokeswoman, declined to comment by e-mail. A VTB Capital press representative and Dimitri Agishev, a Deutsche Bank spokesman, also declined to comment by e-mail. Credit Suisse and UBS didn’t respond to e-mailed requests and calls for comment.

To contact the reporters on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net; Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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