Cleary Gottlieb advised IPJSC Lenta (Lenta), one of the largest multiformat food retail chains in Russia, in its acquisition of the online-retailer Utkonos to create a leading e-grocery platform.
The purchase price for the transaction was ₽20 billion (approximately $260 million). The deal was announced on December 15, 2021, and closed on February 1, 2022.
Severgroup LLC is the 100% owner of the Utkonos business and the 77.99% owner of Lenta’s shares. Lenta’s GDRs are listed in London and Moscow, and its shares were recently listed in Moscow. In light of the common ownership, a special committee of the independent members of the board of directors was formed to consider the transaction and its funding. Cleary advised the special committee, which also had the benefit of a fairness opinion rendered by Citigroup Global Markets Limited.
The transaction is to be funded by a proposed closed subscription of ₽25.643 billion worth of shares to LLP Severgroup at ₽1,087 per share, reflecting the three-month volume-weighted average price (VWAP) for GDRs traded on the Moscow Exchange as of December 14, 2021. Severgroup LLC has given a firm commitment to Lenta to subscribe for ₽20 billion worth of shares. Other shareholders will have preemptive rights in respect of the closed subscription. The closed subscription is subject to shareholder approval, for which purpose an extraordinary shareholders’ meeting is to be held on February 11, 2022.