TPG and VTB consider Lenta listing in London

Alice Murray
30 May 2013

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TPG and VTB Capital are in talks with banks concerning a possible London listing of Russian supermarket chain Lenta.

It is understood that the private equity houses are in very early stages of discussions with banks. TPG is investigating the use of global depositary receipts in order to raise £1bn as part of the flotation. It is thought that the listing would take place at the end of this year or in early 2014.

TPG and VTB first invested in the Russian supermarket chain in October 2009, initially purchasing a 28-30% stake, with VTB taking 10% and TPG the remainder. At the time, the deal was reported to be worth $115m.

In September 2010 a shareholder dispute concerning the company's strategy was sparked, with reports of actual physical fighting taking place at Lenta's head office. By August 2011 the argument was finally resolved with TPG, VTB and the European Bank for Reconstruction and Development purchasing a further 44% stake in the company for $1.1bn. At that point Lenta was valued at $2.6bn.

Lenta currently operates through 58 trade stores and one hypermarket across 33 cities in Russia. The company employs 20,000 people.

News of the possible London IPO comes as several Russian LSE-listed firms are expected to leave the FTSE 100 index over the coming weeks. The exchange will carry out its review of the listed entities, and those with significantly underperforming shares will be exiting the index. Polymetal and Evraz have been earmarked for departure next month.