Int’l investors flock to $5 bln stake sale

MOSCOW - Reuters

Sberbank has bought some foreign banking assets, most recently buying Turkey’s Denizbank for $3.6 billion. REUTERS photo

Russia’s sale of a $5 billion stake in Sberbank has attracted strong demand from investors drawn by the lender’s dominant position in a growing domestic market and potential to expand across emerging European economies.

Marker sources said yesterday the banks in charge of selling the 7.6 percent stake in Europe’s third-biggest lender by equity value were quoting a price of 92-94 roubles per share, and the offering was two times oversubscribed at that level. While below the government’s original hopes for 100 roubles per share, it is up from the 91 roubles that Sberbank set as the minimum bid, and indicates strong demand from investors. “We like Russia,” said one investor, which holds a small stake in Sberbank and aims to buy more.

“Just on simple valuations it is one of the cheapest markets in the world. In investing there, we are trying to be more exposed to the domestic consumer.”

Russia’s economy is growing at around 4 percent, providing a healthy backdrop for Sberbank compared with most European lenders, although growth has been slowing.

Sberbank will retain majority control with a stake of 50 percent plus one share. It was planning to close the order book yesterday, one source close to the deal said. Sberbank yesterday met more than 40 investors in Moscow to explain its strategy, according to one investor present.