Severgroup buys supermarket chain in Russia

RUSSIA / FSU POLITICS - In Brief 06 May 2019 by Alex Teddy
Severgroup purchased 41.9% of the supermarket chain Lenta. Lenta has reported this to the London Stock Exchange. Severgroup is expected to make a binding offer to minority shareholders. Some of these shareholders wanted a rival bid from Magnit to be given more serious consideration. Magnit is another supermarket chain and would have offered a higher share price as well as bringing market expertise.TPG owns 34.4% of Lenta and the European Bank of Reconstruction and Development (EBRD) owns 7.5% of Lent. These are the minority shareholders who are selling. They are selling for USD 3.6 per GDR. The deal stands as USD 729 million. If all minority shareholders go for the offer then Severgroup will have to spend and extra USD 1 billion. Supermarkets grew rapidly in Russia in the 2000s. Growth has slowed in recent years as the market has matured but there are still handsome profits to be made.The proprietor of Severgroup is Alexei Mordashov. By some estimates Mordashov is the richest man in Russia. His business empire started out as a steel company called Severstal.

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