TPG Capital Negotiating for Share in 7th Continent
The largest deal in Russian grocery retailing may take place in September. The U.S. direct investment fund TPG Capital, one of the largest such funds in the world with more than $40 billion under its management, plans to spend $1.1-1.2 billion to acquire 50 percent of the 7K-investholding company, which controls the Seventh Continent chain of supermarkets. If the deal goes through TPG will invest $5-7 billion in the chain's development in the next nine years.
A Seventh Continent executive said that shareholders Vladimir Gruzdev and Alexander Zanadvorov have been in negotiations with TPG for about six months. 7K-investholding owns 74.81 percent of Seventh Continent, which operates the supermarket chain and owns part of its real estate, and 99.46 percent of Mkapital, which owns real estate. The remaining 25.19 percent of Seventh Continent stock is traded on the RTS. Gruzdev, who is a member of the State Duma, and Zanadvorov, former co-owner of Sobinbank, each own 50 percent minus one share in 7K-investholding and plan to sell equal amounts of stock.
Seventh Continent runs supermarkets of the same name and Nash markets, a total of 123 stores in Moscow, Moscow Region, Kaliningrad Region, St. Petersburg, Ryazan and Minsk. TPG will receive about 37 percent of the chain and half of its real estate, if the deal is concluded. TPG, owner of the Burger King chain of fast food restaurants, had shares in PIT, MTV Russia, 36.6 Pharmacy Chain, SIDANKO, Shtern Cement and Versatel (operator of Divo-TV) but sold off all of its Russian assets in 2005.
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All the Article in Russian as of July 19, 2007
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