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TPG-Backed Retailer Lenta May Be Worth $5 Billion, UralSib Says

Lenta LLC, a Russian hypermarket chain that’s reported to be weighing an initial public offering, may be worth as much as $5 billion, UralSib Capital estimated.

The retailer, which is controlled by TPG Capital, may be valued “significantly higher” than its London-traded peer O’Key Group SA, (OKEY) which also runs hypermarkets in Russia, Marat Ibragimov, an analyst at UralSib, said by e-mail today. O’Key has a market value of about $3.4 billion.

Lenta is interviewing investment banks with a view to raising about $1.5 billion listing global depositary receipts, Sky News reported yesterday, without citing anyone. Tim Demchenko, head of private equity at VTB Capital, which owns a 14 percent stake in Lenta, declined to comment. Yana Mogileva, a spokeswoman for Lenta in St. Petersburg, also wouldn’t comment.

Lenta’s revenue rose 22 percent last year to 110 billion rubles ($3.5 billion). The retailer had a margin on earnings before interest, taxes, depreciation and amortization of 11.6 percent, higher than the 10.6 percent Ebitda margin of OAO Magnit, according to a bonds presentation in February.

To contact the reporter on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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