Russia’s MTS to sell its stake in online retailer Ozon to Sistema

Russia’s MTS to sell its stake in online retailer Ozon to Sistema
Russia’s MTS to sell its stake in online retailer Ozon to Sistema
By bne IntelliNews February 20, 2019

Russia’s leading mobile phone company Mobile TeleSystems (MTS) says it will sell its 18.7% stake in Russian online retailer Ozon Holdings to AFK Sistema for RUB7.9bn ($120mn).

MTS paid a total of RUB5.9bn for the stake: RUB2.7bn in 2014 and RUB3.2bn in 2018.

As a result of the deal, MTS will have no ownership in Ozon, while Sistema will control 35.6%, of which 16.3% will be through Sistema VC, in which Sistema has an 80% stake.

The deal is targeted to close in early March. The payment will be made in 3 installments, with the third paid in July 2021 (a market interest rate will apply).

The sale will be at the minimum Ozon valuation, with a delayed payment scheme (plus interest) – suggests c30% premium to MTS investments, reports BCS.

“The deal suggests a Rb42bn valuation for 100% Ozon. The price is at the lower end of valuations for the recent deals, in which Sistema and Baring Vostok increased their stakes in Ozon – Kommersant. The price suggests a c30% premium to MTS investments, and a c10% annualized return. Strategy-wise, we were not big believers in the synergies between the carrier and e-tailer,” Maria Sukhanova of BCS Global Markets said in a note.

 

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