Russian Billionaire Gutseriev Raises $239 Million in M.video Offering

Billionaire Mikhail Gutseriev’s Safmar Group raised 17.6 billion rubles ($239 million) in a secondary public offering of part of its stake in M.video PJSC, Russia’s biggest consumer electronics retailer.

The placement of 24.3 million shares priced at 725 rubles per share, M.video said in a statement Friday. That is a 4.2% discount to its closing price on Thursday and at the low end of the initial price range reported of 725 to 740 rubles per share that Interfax reported Thursday.

“The number of the company’s shares in free circulation more than doubled, which will have a positive effect on the liquidity and investment attractiveness of the company’s securities,” said Boris Kvasov, co-head of equity capital markets at VTB Capital, which helped organize the deal.

The placement contributes to a boom in Russian share placements, which are forecast to raise the most money this year since international sanctions were imposed on Russia in the wake of its annexation of Crimea in 2014. Earlier this month, Fix Price Group Ltd raised $1.7 billion in the nation’s largest retail initial public offering.

“The sale was first mentioned last year back when shares were trading at around 400 rubles, so the difference for the shareholder between 725 and 740 rubles wasn’t a deal breaker,” Dmitriy Skryabin, an analyst at BCS Global Markets, said. “The size of the deal was more important.”

M.video operates over 1,000 stores around Russia and is one of the country’s biggest e-commerce players. After selling the 13.5% stake, Safmar retains about 60% of the company.

Shares were trading down 3.8% at 728.30 rubles at 12:59 p.m. in Moscow.

VTB Capital, BofA Securities, UBS and JPMorgan Chase & Co. were joint global coordinators and bookrunners. Renaissance Capital was an adviser on the offering.

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