Avito and Tavrin had love at first sight

As Forbes found out, up to 40 companies were interested in buying it, including Vladimir Potanin’s Interros, VK holding, the Baring Vostok fund, Rostelecom and the retail retailer Magnit. In addition to KCG, the AFK Sistema group, founded by Vladimir Yevtushenkov, and the investor, who teamed up with Avito’s top management, reached the final stages of negotiations. To win this fight, Tavrin at the last moment offered 10% more for the asset than the nearest competitor.

The fact that one of the largest Runet companies – Avito – is changing its owner, became known in October 2022. The Dutch Prosus sold the ad service to Kismet Capital Group (KCG), the former CEO of MegaFon and former member of the Forbes list, Ivan Tavrin. The deal amounted to $2.4 billion (151 billion rubles), it was financed by the Russian Agricultural Bank.

Prosus began looking for a buyer for Avito in June 2022, two sources told Forbes – surrounded by Ivan Tavrin and who took part in the process of selling the asset. KCG had several dozen competitors. According to a Forbes source who took part in the sale process, the Dutch company received 20-30 applications in total. Another source, close to one of the parties to the deal, says about 40 requests for participation. Of these, about 10 interested persons were admitted to the further stages. Three or four companies went through to the final stage, which included the due diligence procedure, according to a source close to one of the parties to the transaction and an interlocutor who took part in the sale process.

Both of these interlocutors mentioned Vladimir Potanin’s Interros, the VK holding, the Baring Vostok fund, the Rostelecom company and the retail retailer Magnit among the interested parties. In addition to Ivan Tavrin’s holding, the AFK Sistema group reached the final stages of negotiations, says the source who participated in the sale process. A source in one of the interested companies and an interlocutor familiar with the course of negotiations also told Forbes about participation in the fight for Avito by AFK Sistema. Rostelecom and Magnit denied their participation, the rest of the companies declined to comment.

For a long time, market participants considered VK to be the favorite, this candidate could be supported by the presidential administration during the deal, wrote The Bell (recognized as a foreign agent). But the holding dropped out of the race before the final and, according to a source close to Ivan Tavrin, was not the main competitor of KCG. At one of the final stages, another serious applicant entered into negotiations, he and the source who took part in the sale process say. According to the latter, his trump card was the support of top managers of Avito. The applicant spoke with them in the negotiations in a “united front”, says the source of Forbes, without naming the interested party. Avito declined to comment.

In the final, the struggle was price. Three days before the conclusion of the deal, the KCG holding increased the proposed amount so that it turned out to be 10% higher than that of the nearest competitor, says a source close to Tavrin. At the start, the businessman offered about 100 billion rubles for the asset.

In addition to the price, Forbes interlocutors identified several other components of KCG’s success in the fight for Avito. Among them is the approval of the buyer within Russia. Officially, Prosus in the fall of 2022 received approval for a deal with KCG from the Federal Antimonopoly Service and the Government Commission for Foreign Investment Control. But in order to get it, the buyer needed his own “lever” that would guarantee the state that such a large asset as Avito would be managed in the right way, say a source who took part in the sale process and one of Tavrin’s partners.

“At some point, all other bidders were given to understand by government agencies that (KCG) is the most desirable bidder,” says a source at one of the interested companies. The approval may have been influenced by the Naspers initiative. According to a source close to Tavrin, the South African company sent a letter to the Russian government in late summer and early autumn stating that it would like to see KCG as the buyer of Avito. According to him, Naspers did this before the Tavrina holding submitted an application for approval of the transaction – so that none of the other applicants “did damage to the structure.”

The Naspers declined to comment. Prosus did not respond to a request from Forbes.

At the beginning of 2023, Kismet Capital Group also became the owner of almost 23% of HeadHunter, the largest online recruitment service in Russia, paying $147 million to increase its stake in it. Prior to the transaction, Tavrin indirectly acted as the beneficiary of less than 10% of the company.