Russian retailer Magnit said it was offering to buy back blocked shares at a 50% discount from foreign shareholders no longer able to trade its Moscow-listed securities.
It is the first proposal of its kind by a Russian company since sweeping Western sanctions over Moscow's invasion of Ukraine and subsequent Russian countermeasures deprived many foreign investors of the ability to trade in Russian securities.
Magnit's shares leapt around 5.6% in late Friday trading (16 June). They had closed on Thursday, 15 June, at RUB 4,513 a piece.
'The tender offer is voluntary: investors can either participate in it, or retain their shareholding in the company,' Magnit said.
The offer concerned a total of 10,191,135 shares, or around 10% of Magnit's outstanding shares at a price of RUB 2,215 per share.
'That is, it takes into account a 50% discount from the weighted average price of Magnit shares for the last half a year,' Magnit said, meaning a total of RUB 22.57 billion could be spent on the buyback.
Government Approvals
A Russian government commission has determined that foreign companies selling assets in Russia must do so at a 50% discount. Magnit said it had sought approvals from the government.
Magnit's wholly owned subsidiary Magnit Alyans is the buyer, with 19 July the deadline for submission of tender instructions by shareholders.
'The tender offer is also addressed to JPMorgan Chase Bank N.A. with respect to shares held in the depositary bank's depositary receipt programme custody account,' Magnit said.
Magnit said it had worked hard to secure an 'appropriate outcome' for non-resident investors, for whom it expected the tender offer to be primarily of interest.
'Such shareholders will be able to receive proceeds from the sale of shares in Russian roubles or in US dollars, euros or renminbi in bank accounts in Russia or abroad,' Magnit said.
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