Russian struggling mid-cap retailer O’key could be in part acquired by Yandex.Market online marketplace, a joint venture between Russia’s largest bank Sberbank and most valuable digital company Yandex, Kommersant daily reported citing unnamed sources close to the deal.
Previously unconfirmed reports claimed that Sberbank seeks to acquire O’key, which the bank denied. Now reportedly Yandex.Market could acquire a stake in O’key, with Sberbank financing the transaction. Market capitalization of the retailer stood at about $520mn as of the announcement.
“The scale of the acquisition and strategic benefits for Yandex.Market are not clear at this point, but will provide short-term support for O’key,” BCS Global Markets commented on April 23.
O’Key unveiled a new strategy in January 2019, but left investors unimpressed. A new investor that could shake the retailer’s business model is likely to be met positively by the market (the shares jumped by 11% on the previous unconfirmed Sberbank acquisition news).
The news also followed the dramatic acquisition of another O'key's peer Lenta. As reported by bne IntelliNews, minority shareholders of Russian retailer Lenta sent letters to the management enquiring about an offer to buy the company by retailing peer leading supermarket chain Magnit. There is now some confusion over the deal as bne sources say Magnit did not make a formal offer and has not followed up on its original letter outlining a proposed counter offer.
Russia's second-largest retailer Magnit showed interest in Lenta, shortly before the deal with Mordashov was closed, who also owns the Utkanos online grocerty store.