September 17, 2012 / 5:03 AM / 5 years ago

CORRECTED-UPDATE 3-Russia launches $5 billion Sberbank stake sale

(Adds billion to headline)

* Long-awaited sale priced at tight discount

* Deal seen removing stock overhang

* Russia ready to privatise at a fair price

* CEO hopes Asian investors are interested

By Katya Golubkova and Oksana Kobzeva

MOSCOW, Sept 17 (Reuters) - Russia pulled the trigger on the sale of a $5 billion stake in Sberbank on Monday, taking advantage of strong markets to cut the state’s ownership in Europe’s No.3 bank to a bare majority.

The sale of a 7.6 percent stake in Sberbank has been held back for more than a year by shaky financial markets, but last week’s announcement of a new round of credit easing by the U.S. Federal Reserve opened the window to a placement.

Russian stocks rallied by 8 percent on Friday after the news from the U.S. central bank, propelling Sberbank shares to their highest close since April and putting the state in a position to sell into market strength.

“This was the best day of the past 15 months to take the decision to go to the market,” Chief Executive German Gref told Reuters in a telephone interview.

Gref hopes asset managers in China, Singapore and Hong Kong, among others, will be interested in the offering, which will take place during three days. Books may be closed at any time, he added.

The accelerated sale will help clear a stock overhang that has held back the share performance of the former Soviet state savings bank, and capped Russian stock valuations at a 50 percent to other emerging markets.

It will boost the tradeability of Russia’s most liquid blue-chip stock, widely viewed by investors as a proxy on the world’s ninth-largest economy, which grew at a rate of over 4 percent in the first half of the year.

The secondary stock offering will deliver a welcome revenue windfall but it also sends a signal to markets that Vladimir Putin, recently re-elected president, is willing to sell off state assets at what he considers to be a fair price.


Sberbank said that it would price the sale of 1.7 billion shares at between 91 roubles ($2.99) apiece and the market price at the time of closing the books the sale.

The minimum price represents a discount of 6 percent to Friday’s closing price of 97.05 roubles. Although the bank’s stock fell by up to 2 percent on Monday, the relatively tight pricing buoyed market confidence that the deal would be strongly supported by investors.

“The timing of the deal is perfect: first, you have strong global market dynamics,” said Jason Hurwitz, a senior analyst covering the financial sector at Alfa Bank in Moscow.

“Secondly, we think it is clear that Russian banks including Sberbank will face diminishing profitability,” added Hurwitz. “So why not sell the stake now?”

While the government had eyed a placement price north of 100 roubles per share, holding out could have proved risky as the Russian economy is losing momentum as demand for exports of oil and gas to Europe is sapped by the euro zone debt crisis.

“This placement is definitely interesting to us,” said Kirill Bagachenko, a senior portfolio manager at TKB BNP Paribas Investment Partners.

“If we are talking about emerging markets, it has unique liquidity and is extremely cheap at around 1.4 times book value.”


The sale will take place in Moscow and London, the bank said. A source close to the deal said that the order book was likely to close on Tuesday.

Of the aggregate offering, up to 10 percent will be placed via Moscow’s MICEX stock exchange, Sberbank said. At the discretion of the central bank, through which the state holds its controlling stake in Sberbank, the share of the offering to be placed in Moscow may be increased to 15 percent.

Sberbank will make the bulk of the placement in London in the form of global depositary shares, with each GDS representing four ordinary shares. No new shares will be sold, meaning the proceeds of the stock offering will accrue to the state.

The central bank, which will reduce its stake in Sberbank to 50 percent plus one voting share through the sale, appointed Credit Suisse, Goldman Sachs International, J.P. Morgan, Morgan Stanley and Troika Dialog as joint global coordinators of the deal.

Sberbank said that its subsidiary LLC Sberbank Investments may acquire the equivalent of up to 20 billion roubles of ordinary shares in the offering at the offer price and on the same terms as other investors. ($1 = 30.4837 Russian roubles) (Additional reporting by Olga Popova; Writing by Douglas Busvine; editing by Anna Willard)

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