OAO Pharmacy Chain 36.6 rallied the most in three months on a report Russia’s biggest drugstore chain may issue new shares to merge with another pharmacy group.
The stock jumped as much as 13 percent and was 12 percent higher at 36.78 rubles by 3:21 p.m. in Moscow, the biggest intraday advance since Nov. 2. The volume of shares was 2.3 million, equivalent to about 16 times the three-month average, according to data compiled by Bloomberg.
36.6 may issue new shares to raise as much as $300 million for a possible merger with A5 Pharmacy Chain, Kommersant reported today, citing Sergey Solodov, an A5 shareholder, and a person close to 36.6 who it didn’t identify. The merged company will control 25 percent of the Moscow pharmaceutical market, according to an e-mailed report from RYE, Man & Gor Securities in Moscow.
“The combined company may utilize increased economies of scale and take advantage of a strong market position, which could allow the company to bargain for better purchasing and payment terms with suppliers,” Marat Ibragimov, an analyst at UralSib Capital in Moscow, said in an e-mailed note. “The equity-financed structure of the deal may improve the free-float and support the stock’s liquidity, which should be positively received by equity investors.”
36.6 shares lost 17 percent last year.
Calls and e-mails to 36.6’s spokesman Artyom Baybuz in Moscow weren’t immediately returned. An e-mail to A5 wasn’t immediately returned.
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