Russian businessmen, the head of Interros Vladimir Potanin and co-owner of Lukoil Vagit Alekperov, sent an offer to Yandex to buy control in the Russian division of Yandex, which is estimated at $7-7.5 billion, Bloomberg reported citing anonymous sources. .
Discussion of the proposal by the board of directors of the Dutch Yandex NV, which controls the Russian business of Yandex and its foreign assets, “may take place next week as part of a series of meetings in Dubai,” but it’s not a fact that the parties will come to an agreement on the deal, the agency’s interlocutors note.
Representatives of Yandex, Potanin and Alekperov declined to comment on information about the negotiations.
We are talking about buying at least 51% in the Russian business of Yandex, which is estimated at 560-600 billion ($7-7.5 billion), taking into account the authorities’ requirement for a 50% discount when foreigners sell assets in the Russian Federation, Bloomberg sources say. The main legal entity of Yandex, Yandex NV, which now manages both Russian and foreign assets of the company, is in the jurisdiction of the unfriendly Netherlands, the agency adds.
We are talking about the government’s requirements for the exit of foreign shareholders from Russian assets, under which a 50% discount should be applied, explains Vladimir Bespalov, an analyst for the TMT sector. Accordingly, 560-600 billion rubles. – this is probably an estimate already taking into account the discount, and initially the fair price was set twice as high, i.e. 1.1-1.2 trillion rubles. Now only shares of the Dutch “Yandex” are traded on the Moscow Exchange, and trading in New York has been suspended, the division of the company has not yet taken place, so the mention of “Russian Yandex” is conditional, he draws attention.
Accordingly, for the redemption at a discount of a 51% stake, which will be redeemed from the Dutch structure, investors can pay about 280-300 billion rubles, Bespalov estimates. The current market capitalization of all Yandex (Yandex NV) is 725.5 billion rubles. (at the time of the closing of the Moscow Exchange on May 19), respectively, an estimate of 1.1-1.2 trillion rubles. when selling the Russian part, it is generally adequate, the analyst points out.
560-600 billion rubles the business of the Russian Yandex is worth it, Leonid Delitsyn, an analyst at the Finam Group, confirms. Accordingly, investors can acquire 51% of Yandex’s business for 280-300 billion rubles, he agrees.
After the publication by Bloomberg around 10:00 Moscow time on May 19, Yandex shares on the Moscow Exchange began to grow: at the peak at 14:20 Moscow time, their value increased by 11.8% to 2271.4 rubles. for paper. By the time the note was released, shares had corrected to 9.4%.
Now the main shareholder of the company is still LASTAR Trust, a family trust of the founder of Yandex, Arkady Volozh. It controls 45.1% of the voting shares and 8.5% of the share capital. 46.5% of voting shares and 87.9% of share capital are in free float.
“According to the irrevocable decision of Arkady Volozh, taken in July 2022, LASTAR Trust will not accept his instructions on how to vote these shares. The trust will vote with shares only according to the recommendations of independent members of the board of directors of Yandex.
Yandex discloses a breakdown only at the level of EBITDA, and in 2022, search, classified and taxi businesses had positive EBITDA, while e-commerce and media turned out to be unprofitable, points out Maria Sukhanova, senior analyst at BCS World of Investments.
Now Yandex is considered unprofitable in the areas of e-commerce, experimental initiatives (for example, unmanned technologies), Yandex.Food and Delivery Club, Bespalov agrees with her.
However, the unprofitable segments the company is likely to continue to develop, so the Russian “Yandex” is unlikely to be very different from the one that was before the division, he continues. It is unlikely that future investors will split Yandex, agrees Delitsyn. The company’s core business is search, e-commerce and transportation, but none of these are a “well” for investors, he continues. Search is profitable, but it has nowhere to grow, and e-commerce is still unprofitable, but the value of Yandex lies in the synergy between different areas, he argues.
The possible acquisition of shares in the Yandex business by Alekperov and Potanin will be done primarily for economic benefits, since these investments will not overlap with their core business and provide an opportunity to earn on the “technological leader,” Bespalov argues.
“The idea is that representatives of the Russian business community buy out a stake in the Russian Yandex. At the same time, control will be in the hands of management, which will control the company, determine its strategy and development,” he believes.
Most likely, Alekperov and Potanin are interested in the asset because they are socially responsible entrepreneurs and want to participate in “saving the digital future of Russia,” Delitsyn believes. Artificial intelligence and e-commerce is a growing business, and even if it does not turn a profit, there may be someone else who wants to buy Yandex’s share at a high price.
“With a high degree of probability, Alekperov and Potanin do not acquire a stake in Yandex forever, it can be a direct investment for the final sale to a player who wants to be in these markets forever, who has higher synergy, for example, Sberbank, Rostelecom or MTS,” concluded Delitsyn.
Yandex. Share everything
In November 2022, Yandex announced plans to split the company. A number of businesses, including autonomous cars, cloud technologies, and others, will continue to operate in Russia, but their international parts will be separated into independent companies under the control of a company in the Netherlands, the company said at the time. The main part of Yandex NV’s business, taking into account a number of foreign directions, can be separated into a separate group of companies that will retain the Yandex brand, the company said in a statement. “Dutch Yandex NV plans to eventually withdraw from the shareholders of this group of companies and change its name,” the press service of Yandex reported in November. Such a scheme was implied by the decision of the board of directors “on preliminary intentions.” The company also studied then the possibility of changing the corporate structure, in which it was planned to transfer the management of the selected group of companies to the management of Yandex, it was then noted in the statement. The timing of the implementation of this plan was not called at that time.