Completion of the purchase by Severgroup of Luna Inc.’s and EBRD’s Lenta GDRs (the «Severgroup Purchase») is subject to a number of conditions, including Russian Federal Antimonopoly Service («FAS») approval. Upon completion of the Severgroup Purchase, and as required by the articles of association of Lenta, Severgroup will make an offer to all the Company’s shareholders/GDR-holders (which will not be subject to any conditions) to acquire their Lenta shares/GDRs at a price of $3.60 per GDR ($18 per share) (the «Offer»).
We see tremendous value in businesses that improve people’s quality of life and we believe there is great potential in retail as an industry which is now going through important transformation to meet the growing demands of consumers. Widely known as an efficient grocery retailer with one of the highest growth rates in the market, Lenta is a unique asset to unlock this potential in the Russian market. We are confident that combining Lenta’s highly professional management team and excellent corporate culture with Severgroup’s experience in building and managing successful businesses, deep expertise in both industrial and consumer sectors as well as in the digital & IT sector will enhance the company’s position as a leading grocery player in terms of customer’s service, offering and loyalty.
Since TPG first acquired a stake in Lenta, the company has gone through a substantial transformation to become one of Russia’s top 3 grocery retailers and largest hypermarket chain. During this period Lenta has built a reputation for high quality management and best in class corporate governance. Having established this robust market position and strong track record the company is well-positioned to take advantage of the opportunities in the Russian retail sector with Severgroup as its largest shareholder.
We have always been dedicated to providing our customers with a full range of best-in-class services. We understand that, to ensure that today we meet the needs of all of our existing customers and to attract new ones, we need a unique selling proposition. This is only possible through a deep understanding of our customers and fulfilling their demands through innovative tools. We are glad to welcome Severgroup, a new strategic investor who have committed to create value for all shareholders through a combination of Lenta’s strong market position and deep data-driven customer knowledge with Severgroup’s experience of online retail and digital marketing.
The Severgroup Purchase is expected to complete before end of May 2019, subject to receipt of FAS approval and satisfaction of the other conditions as agreed between the parties.
Severgroup retained Citigroup Global Markets Limited as its financial advisor in relation to the contemplated transaction and subsequent mandatory tender offer. Freshfields Bruckhaus Deringer LLP acted as legal advisor of Severgroup.
Severgroup will hold a call for analysts and investors at 14:00 UK time on Wednesday, 3rd of April 2019.
Tomas Korganas, Director for Strategy and M&A, will be speaking on behalf of Severgroup at the call.
The presentation will be available on http://severgroup.ru/eng/news/index.phtml
To participate in the call please use the following dial-in details:
Conference ID: 9315165
Conference call dial-in:
+7 495 646 9190 (Local access)
8 10 8002 8675011 (Toll free)
+44 (0) 330 336 9411
Replay Passcode: 9315165
+44 (0) 207 660 0134 (Local access)
810 800 2702 1012 (Toll free)
Lenta was founded in 1993 in St. Petersburg and is now the largest hypermarket chain in Russia and the country’s third largest retail chain. Lenta operates 245 hypermarkets in 88 cities across Russia and 135 supermarkets in Moscow, St Petersburg, Central, Siberia and Ural regions, with a total of approximately 1,472,714 sq.m of selling space. The average Lenta hypermarket store has selling space of approximately 5,500 sq.m. The average Lenta supermarket store has selling space of approximately 800 sq.m. The Company operates eight owned distribution centres. The Company’s price-led hypermarket formats are differentiated in terms of their promotion and pricing strategies as well as their local product assortment. The Company employed approximately 45,759 people as of 31 December 2018. GDRs representing Lenta shares (with five GDRs representing one share) are admitted to trading on the London Stock Exchange and on the Moscow Exchange and trade under the ticker: ‘LNTA’. For more information, visit http://www.lentainvestor.com
Severgroup founded in 1993, is a private investment company which makes long-term investments and manages assets on behalf of Alexey Mordashov. The Group was formed to develop established businesses and invest in attractive new projects. Severgroup’s portfolio comprises 14 successful businesses in different segments: metals and mining, power plant engineering, gold mining, woodworking, tourism, wholefood e-commerce, banking, talent tech, high-tech venture capital, media, advertising, telecommunications and medicine. For more information, visit www.severgroup.ru
TPG is a leading global alternative asset firm founded in 1992 with more than $103 billion of assets under management and offices in Austin, Beijing, Boston, Dallas, Fort Worth, Hong Kong, Houston, London, Luxembourg, Melbourne, Moscow, Mumbai, New York, San Francisco, Seoul, and Singapore. TPG’s investment platforms are across a wide range of asset classes, including private equity, growth venture, real estate, credit, and public equity. TPG aims to build dynamic products and options for its investors while also instituting discipline and operational excellence across the investment strategy and performance of its portfolio. For more information, visit www.tpg.com
This announcement is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the Offer or otherwise, nor shall there be any sale, issuance or transfer of securities of Lenta in any jurisdiction in contravention of applicable law. The Offer, if made, will be made solely by means of the offer document proposed to be sent to (among others) Lenta shareholders and Lenta GDR holders containing and setting out, among other things, the full terms of the Offer (the «Offer Document»), which will, together, contain the full details of how the Offer may be accepted.
Lenta is incorporated under the laws of the British Virgin Islands and, as such, is not subject to the jurisdiction of the UK City Code on Takeovers and Mergers (the «City Code») or any equivalent takeover regulations. In particular, this announcement does not amount to a firm intention to make an offer under Rule 2.7 of the City Code. Lenta has incorporated certain takeover-related provisions into its articles of association (the «Articles») but these do not provide Lenta shareholders or Lenta GDR holders with the protections offered by the City Code, and enforcement of such provisions are the responsibility of Lenta, not the UK Takeover Panel. Accordingly, Lenta shareholders and Lenta GDR holders are reminded that the UK Takeover Panel does not have responsibility for ensuring compliance of the Offer with the City Code and is not able to answer shareholders’ queries in that regard.
The availability of the Offer, if made, to Lenta shareholders and Lenta GDR holders who are not resident in and citizens of the UK, Russia or the United States may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Such persons should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions. Lenta shareholders and Lenta GDR holders who are in any doubt regarding such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay. Further details in relation to Overseas Shareholders will be contained in the Offer Document.
The Offer, if made, will be made for the securities of a BVI incorporated company and will be subject to disclosure requirements which are different from those of the United States. Lenta’s financial information, including any included in any offer documentation, has been or will have been prepared in accordance with International Financial Reporting Standards and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.
The Offer, if made, will be made in the United States pursuant to an exemption from the US tender offer rules provided by Rule14d-1(d) under the US Exchange Act. Accordingly, the Offer will be subject to disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments, that are different from those applicable under US domestic tender offer procedures and law.
In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act, Severgroup or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Lenta shares or Lenta GDRs outside of the United States, other than pursuant to the Offer, until the date on which the Offer is complete, lapses or is otherwise withdrawn. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required by applicable laws, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website at www.londonstockexchange.com.
Lenta shares have not been registered in the Russian Federation and have not been, and are not intended to be, admitted to «placement» and/or «public placement» and/or «public circulation» in the Russian Federation. Accordingly, this document and the information contained in it is not an offer, or an invitation to make offers, sell, purchase, exchange or transfer Lenta shares in the Russian Federation and is not purporting to constitute an advertisement of Lenta shares in the Russian Federation. Any sale or transfer of Lenta shares in the territory of the Russian Federation will be subject to the requirements and restrictions set forth by Russian law, including the Russian currency control laws, as discussed below. Russian residents (in the meaning defined in the Russian currency control laws, which definition includes Russian citizens, legal entities incorporated in Russia and foreign citizens and stateless persons permanently residing in Russia under residence permit) («Russian Residents») are permitted by Russian currency control laws to tender Lenta shares or Lenta GDRs under the Offer only if (i) the transfer of such securities to Severgroup is recorded with an entity or entities licensed to provide depositary services in Russia (a «Russian Depositary») and (ii) payment by Severgroup for such securities is made in Russian Roubles. As Lenta shares are currently not eligible for depositing with Russian Depositaries, no Offer will be made in respect of the Lenta shares to Lenta shareholders who qualify as Russian Residents, whether or not such Lenta shareholders qualify as «qualified investors» for the purposes of Russian securities market laws. The terms of the Offer will not restrict those Lenta shareholders from depositing relevant Lenta shares in accordance with the deposit agreement relating to global depositary receipts in respect of equity shares of Lenta dated 28 February 2014 between Lenta and Deutsche Bank Luxembourg S.A. and tendering the Lenta GDRs representing those Lenta shares under the Offer. Lenta GDRs tendered by Russian Residents under the Offer will have to be delivered from securities accounts of the tendering Lenta GDR holder with a Russian Depositary to the securities account of Severgroup with the Russian Depositary designated in the offer documentation. Such tendering Lenta GDR holders will be paid in Russian Roubles at the exchange rate of US$ to Russian Rouble established by the Central Bank of the Russian Federation as at the relevant payment date in accordance with the procedure to be specified in the offer documentation.
The release, publication or distribution of this announcement in or into jurisdictions other than the UK or Russia may be restricted by law and therefore any persons who are subject to the law of any jurisdiction other than the UK, Russia or the United States should inform themselves about, and observe, any applicable requirements. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction.
 FTE (full-time equivalent). Average FTE for 1H2018 was 49,643 employees.