A MAJOR stake in Russia’s largest bank will go on sale this week, it was announced yesterday, as the country’s central bank takes advantage of positive market sentiment.
The 7.6 per cent stake of Sberbank is expected to bring in roughly $5bn (£3.1bn) for the Russian state, with 85 to 90 per cent of the sale taking place on the London Stock Exchange (LSE) and the remaining 10 to 15 per cent on the Russian MICEX.
The London shares will be placed as global depository shares – tradeable instruments each representing four ordinary shares.
That will reduce the central bank’s stake in Sberbank to 50 per cent plus one voting share.
London listings are increasingly popular among Russian firms looking to take advantage of the City’s wider pool of investors and the reassurance that comes with London’s tougher rules on governance.
Sberbank’s chief executive explained that he has been looking to sell the stake for months, but only now have markets looked sufficiently positive to make it work. “This was the best day of the past 15 months to take the decision to go to the market,” said German Gref.
The launch of QE3 by the Fed, a bond-buying programme from the European Central Bank and the approval of the ESM bailout fund by a top German court have all pushed markets up, encouraging the sale.
“This combination of events which all exceeded expectations improved sentiment, and there is no event that might interfere with that for the rest of the month,” explained a source yesterday.
RUSSIA’S biggest bank has hired the biggest names of the investment banking world to launch this offering, with five top firms acting as joint global coordinators and joint bookrunners on the deal.
Goldman Sachs’ team is led by Richard Cormack, MD in equity capital markets (ECM) and Tilo Dresig, MD in the financial institutions group (FIG).
Credit Suisse, Morgan Stanley and Morgan Stanley are also in on the deal.
Meanwhile JP Morgan’s Russian teams are busy – City A.M. understands they are also working on an initial public offering (IPO) for MD Medical Group.
MDMG is one of the country’s largest healthcare firms, and is also looking to join the rush of Russian firms listing in London. The formidable array of advisers on the Sberbank sale is rounded off with Russian institution Troika Dialog, an aid in listing on the Moscow stock exchange MICEX, where the central bank hopes to sell 10 to 15 per cent of this stake.