Mail.ru Group Ltd., a Russian investor in Facebook Inc., surged 30 percent in London trading after raising $912 million in the city’s biggest initial public offering since July.
The operator of Russian social-networking sites and online game platforms climbed $8.30 to $36 today. The Moscow-based company and its existing shareholders sold 32.9 million global depositary receipts at $27.70 each, the top end of the $23.70 to $27.70 offering range, according to a Regulatory News Service statement. Mail.ru had orders for 20 times the shares available in the IPO, said two people familiar with the transaction, who declined to be named because the information isn’t public.
The IPO was the biggest in the U.K. since Nathaniel Rothschild’s mining fund, Vallar Plc, raised $1 billion in July. The offering from Mail.ru, partly owned by billionaire Alisher Usmanov and South Africa’s Naspers Ltd., came after share sales by emerging-market companies attracted more money than industrialized nations for the first time in at least a decade last quarter.
“Mail.ru is an interesting story with the Facebook factor, plus that it’s a very good asset by itself,” said Ivo Kovachev, a senior emerging-markets money manager in London at JO Hambro Capital Management Ltd., which oversees about $6.3 billion. “It’s not surprising to see people buy into emerging-market IPOs and this trend will probably continue.”
Emerging Market IPOs
The company sold $84 million of shares while its existing shareholders reaped $828 million, according to the statement. They may raise a further $91 million selling shares in the over-allotment option, given sufficient demand for the stock.
A London-based spokesman for Mail.ru declined to comment on how many times the IPO was oversubscribed. The company will use the primary proceeds to partly fund the acquisition of an additional stake in vKontakte, a Russian social network service.
Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley of New York and Russia’s VTB Capital arranged the IPO.
Mail.ru owns 2.4 percent of Palo Alto, California-based Facebook, the world’s largest social networking service, according to an Oct. 11 statement. Mail.ru also has a 5.1 percent stake in Chicago-based Groupon Inc., the Daily Deal website with 20 million subscribers, and 1.5 percent of Zynga Game Network Inc. in San Francisco, the maker of the “FarmVille” and “FrontierVille” games.
Revenue at Mail.ru may increase 51 percent this year to $301 million, while earnings before interest, tax, depreciation and amortization are likely to rise 70 percent to $104 million, analysts at Goldman Sachs said in a note last month.
Companies in the MSCI Emerging Markets Index’s 21 countries raised $141 billion through IPOs and additional sales last quarter, more than double the amount in industrialized countries, data compiled by Bloomberg show.
Coal India Ltd., the world’s largest coal producer, yesterday surged 40 percent on its first trading day after investors bid for 15 times the shares sold in the country’s largest IPO. India’s government raised 152 billion rupees ($3.4 billion) last month selling a 10 percent stake in the company.