The best deal of my entire career

Date: 19 September 2012

Source: Gazeta.Ru

Ruben Vardanyan tells about the Sberbank privatization deal

Ruben Vardanyan, President of Troika Dialog, the coordinator of Sberbank’s recent SPO, shared with Gazeta.Ru that he considers the deal the most successful of his career. And given the high demand for the shares of the state-controlled bank, the window for new placements this year is not closed, added Vardanyan.

I consider it to be the best deal of my entire career as an investment banker. This is the case for a number of different reasons: timing, number of investors, the structure of the deal. It was one of those situations where both the seller and buyer walked away satisfied. The deal was viewed very positively by outside observers. Also I want to mention how diverse the clients were. If you can talk about such a thing as an ideal sale, that was it.

No, quite the opposite. It was a unique discount both for the issuer and the Russian market – just 1.9% to the spot price per local share. No Russian company had achieved such tight pricing. Usually the discount runs 5-10%. Furthermore, you shouldn’t arrange a deal in such a fashion that investors can’t earn anything themselves. That’s not right. So a minimal discount is fair.

Quite a lot. More than three hundred. Some of them were already Sberbank shareholders and some of them weren’t. It’s an enormous group of clients that have different views on Russia and manage funds of different sizes.

It was a completely evenly distributed placement. There were no anchor investors.

That information cannot be disclosed. And in any case, the point isn’t which names were involved, but the fact that new money has come into the Russian economy.

Yes, there were Russian clients who participated in the SPO, including through the Moscow exchange. This was the first placement in which investors in both Moscow and London have been able to simultaneously participate.

We can’t comment on that.

The placement went very quickly here and there wasn’t a big publicity campaign for it. Don’t forget that this is the first time a parallel placement had been held on both the London and Moscow exchanges.

No, that’s not it. The issue is the size of our market. Given that 3% of the total amount of an offering which exceeded $5 bln is more than $150 mln, that’s a very good number for a developing exchange.

That wasn’t the announced size of the offering, but rather the maximum amount that could be bought, but may not be.

No, for us all investors are equal.

It can only be solved by changing the law and increasing the share of depository receipts in total shareholder capital.

Of course. Deals like this stimulate the infrastructural development of the local market, including from a technological standpoint. Ultimately, this should lead to most placements being made in the local market, with participation of not only Russian but also international investors. In this case, we won’t have to go to Western markets in order to find investors from all over the world.

I think so. The oversubscription achieved by Sberbank shows that investors are ready to invest in attractive Russian companies that have clear prospects for growth.

Why would it be? It’s the last deal as a part of Troika Dialog, the last time the company’s logo will be featured in connection with a placement. It’s symbolic that the last deal we did before the final merger with Sberbank was a placement of Sberbank shares. We do have a lot of mandates for a wide variety of deals and we hope to be able to continue to build on our advantage. We have already done a lot in that regard.

I am very proud of what was accomplished during the Troika era. Now new possibilities are opening up for us, the beginning of a new stage. The future will be interesting.

I can’t say. You already know about some of them, they’ve been announced. (Sberbank’s investment block, into which Troika Dialog was integrated, is planning to serve as market maker for MegaFon’s IPO – Gazeta.Ru)

It hasn’t been definitively decided. I will be working at least until January 1, 2014, when the second phase of the deal between Sberbank and Troika Dialog will be completed.