Russia’s Magnit To Buy Back Around 21.5% Of Shares From Western Investors

By: Trademagazin editor Date: 2023. 07. 28. 09:49

Russian retailer Magnit said it plans to buy back approximately 21.5% of its shares, finalising the results of a tender offer that could enable some Western investors to sell off blocked Russia holdings, albeit at a discount.

The offer to buy back shares at a 50% discount, a requirement demanded by the Kremlin, is the first proposal of its kind by a Russian company since sweeping Western sanctions over Moscow’s invasion of Ukraine and subsequent Russian countermeasures deprived many foreign investors of the ability to trade in Russian securities.

Magnit, Russia’s second-largest retailer with almost 28,000 food and home goods stores across Russia and Uzbekistan, initially offered to buy back 10% of its shares, but ended up tripling the offer to almost 30% after strong demand from Western investors.

Magnit obtained government approval for the share buyback, something Western executives have said is a lengthy and difficult process.
Two sources with knowledge of Magnit’s plans have told Reuters that should Magnit’s offer succeed, it could open the door for other companies to follow suit and allow Western investors to recoup more blocked funds.

ESM