ALISHER Usmanov’s Russian telecoms group Megafon appeared to be on track to successfully pull off its £1bn plus flotation yesterday, with banks saying the controversial share sale had attracted sufficient investor demand.
The listing of Russia’s second-largest mobile phone firm was nearly killed at its inception when the intention to float announcement was accompanied by news that Goldman Sachs, the US investment bank, had stepped aside from the deal despite previously being tipped to be the lead bank.
Sources at Goldman Sachs suggested the bank was perturbed by corporate governance issues relating to the ownership structure of an umbrella company that will own Megafon and other Usmanov assets, including the tycoon’s shareholding in Arsenal football club.
Yesterday it was suggested that the share sale was boosted when a large global investment fund placed an order for more than a tenth of the shares on offer.
Megafon is trying to sell global depositary receipts in London, the US and Moscow at $20 to $25, raising between $1.7bn and $2.3bn (£1.06bn and £1.44bn) and valuing the business at $11.2bn to $14bn.
The books on the deal are set to close later today.
Banking sources said they expected pricing to be towards the lower end of the range.