Severgroup announces completion of acquisition of 42% stake in Lenta Ltd. and launches of mandatory tender offer to Lenta shareholders

Severgroup LLC («Severgroup»), a private investment company managing assets of Alexey Mordashov, announces completion of acquisition of approximately 41.9% of Lenta Ltd. (LSE, MOEX: LNTA) («Lenta», «Company») share capital (excluding treasury shares) from Luna Inc. (an investment vehicle beneficially owned by the TPG group) and the European Bank for Reconstruction and Development («EBRD») at $3.60 per GDR ($18 per share) for a total cash consideration of approximately US$729 million.

In accordance with previously made statements and as required by the articles of association of Lenta, Severgroup has launched an offer («Offer») to acquire Lenta shares/GDRs from all the Company’s shareholders/GDR-holders at a price of $3.60 per GDR ($18 per share).
We are delighted to welcome Lenta into the Severgroup family. We are convinced that our expertise in technology and online retail will enable us to contribute significantly to unlocking the great potential of the company, which is unique both in terms of its business-model and the strength of its professional team. We will work with the management to drive Lenta to become the market leader in terms of customer loyalty through creating a truly unique proposition. We also know from experience that public companies with strong corporate governance are best positioned to deliver superior shareholder returns. That is why we want Lenta to maintain its public status after the mandatory tender offer closes so that remaining shareholders can share in company’s future succes.
Alexey Mordashov
CEO of Severgroup
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

Further information

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 has been made solely by means of the offer document to be made available 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, together, contains 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 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 are contained in the Offer Document.

The Offer has been 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 be) 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 has been 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 is 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 is 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 has been 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 do 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 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.