Yandex buyers will have to buy more than 100 million securities of the Dutch YNV
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Russian investors who buy out the Yandex business (MOEX: YNDX) from the Dutch Yandex NV (YNV), it will be necessary to purchase a significant amount of the latter’s securities from third-party shareholders or increase the amount that must be paid in cash as part of the transaction, financial market participants say. Brokers say that some of the securities have already been purchased. According to experts, new Yandex investors will not only purchase, but also exchange securities for shares of the Russian company at a “more or less fair ratio.”
The consortium of investors and managers, which is buying out the Yandex business from the Dutch YNV, has already purchased about 68 million shares of YNV, a source in one of the major brokers told Kommersant. It is this volume of securities in addition to money that is needed for the first stage of the transaction (should be completed by the end of June). For the second stage (about seven more weeks are allotted for it), according to the source, the consortium needs to find and buy another 108 million shares from investors. The current market value of the already purchased stake exceeds 224 billion rubles, but how, when, from whom and for how much the securities were purchased is unknown.
YNV owns the main structures of Yandex in Russia (including Yandex LLC) through the MKAO Yandex, registered in the Kaliningrad region; 100% of MCAO Yandex belongs to YNV. In the latter, 87.9% of the economic share is in free circulation (shares are traded on the Moscow Exchange), 8.5% belongs to the family foundation of Yandex co-founder Arkady Volozh, 3.2% belongs to employees and managers of the company.
Under the terms of the deal, approved on February 5, YNV will sell almost the entire Yandex business for 475 billion rubles: at least half of it must be paid in cash, the remaining share in YNV class A shares. The buyer of Yandex will be the closed mutual fund Consortium.First (including shareholders – managers of Yandex in the Russian Federation, LUKOIL structures, founder of LETA Capital Alexander Chachava, director of the Infinitum depository Pavel Prass and ex-deputy chairman of Gazprom Alexander Ryazanov).
At the first stage, YNV will transfer 68% of Yandex to the consortium, and at the second stage – the remaining 32%. After this, Yandex MCAO will become the head structure of the group. YNV plans to change its name and develop some of the former Yandex projects outside Russia (see Kommersant on February 6).
Kommersant’s source sees two scenarios for Russian holders of YNV securities. In the basic version of MCAO, Yandex will issue new shares and exchange them for YNV securities in a certain proportion: “With what coefficient is an open question. But we are inclined to believe that it will be more or less fair. For Yandex, this is a matter of reputation, and the regulator may intervene.” The negative scenario implies the repurchase of YNV securities “at a significant discount, at 1.3–1.4 thousand rubles. per share” (on the evening of February 7 they cost about 3.3 thousand rubles). Closed mutual fund Consortium.First declined to comment.
A large management company believes that during the second stage of the transaction, YNV shares owned by local investors (with storage in NSD) will be converted into securities of ICAO Yandex: “We assume that at a more or less market ratio – that is, one to one ” From holders of Yandex shares stored in Euroclear, the securities will be purchased at a discount of 60–70% to the price on the Moscow Exchange, “or they will not be purchased at all.” However, independent financial analyst Andrei Barkhota believes that it will be difficult to acquire 108 million shares in the Russian circuit: “It will probably be possible to get up to 80% of the required package.”
If the current shareholders choose to remain co-owners of the Dutch company, the new investors of Yandex will have to pay part of the amount in money, notes FG Finam analyst Leonid Delitsyn. As for buyers, he said they “will be driven by circumstances and seek a combination of share buybacks and exchanges, as well as possibly a cash payment to YNV.” The exchange, the analyst believes, looks more profitable, since “new large shareholders no longer need to look for money – they simply share a minority stake without losing control of the company.”
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