Inside Track: Supermarket set to repair Russian reputation in London
THERE’S been many a well-known company, from the likes of retailer Harvey Nichols to the property website Zoopla or even the restaurant website Just Eat, tipped to float on the reviving London new issues market, but it looks likely one of the first companies to make it across the line will be Lenta, which is among the largest supermarket groups in Russia.
Lenta, which is currently owned by private equity group TPG, the Russian bank VTB and the European Bank for Reconstruction and Development, is in the throes of visiting institutions in the UK, Europe and the US with a view to having a dual listing in Moscow and London within the next month or so.
A cost conscious supermarket that still manages to sell Don Perignon champagne and other luxuries, Lenta is led by the impressive Dutch businessman Jan Dunning, who is going down well with investors who might otherwise have been wary of a company from Russia after some of the scare stories of the past couple of years.
Some would-be investors remember only too well that shares in Tinkoff Credit Systems, for example, fell 40 per cent in one day’s trading towards the back end of last year on fears of a law change in Russia.
Dunning is dismissive of the comparisons and rightly so. “No matter how hard I try there’s no comparison between Tinkoff and the Lenta story,” he says, before describing the group’s rapid growth, especially in the past year when like-for-like sales were up 10 per cent and the group opened 21 new hypermarkets. Russia, he adds, offers plenty of opportunity for rapid expansion for retailers such as his. The top five retailers currently only have a 20 per cent market share, leaving much room for growth. There are plans to double the group’s selling space by the end of 2016.
Lenta’s current investors have yet to decide how much of their holdings they wish to sell in the float, but Dunning sees them being involved for some time to come. “I see no signs of fatigue in their relationship with us,” he says.
JP MORGAN OFF TO A GOOD START
A lesser institution might have been laid low by the $20bn of fines that have been paid to regulators over the past year relating to events surrounding the financial crisis.
But early data from ThomsonReuters on UK M&A demonstrates that JP Morgan has got off to a sprightly start this year, advising the likes of Ziggo, Foster Wheeler, Smith & Nephew and Foreign & Colonial in the largest deals of the year so far. JP Morgan leads the table so far, but the likes of Bank of America Merrill Lynch and Morgan Stanley aren’t far behind.
david.hellier@cityam.com