Russia’s Biggest Alcohol Retailer Seeks Up to $1.3 Billion in IPO

Yuliya Fedorinova
·2 min read

(Bloomberg) -- Mercury Retail Holding Plc, which controls Russia’s biggest chains of alcohol retailers, seeks to raise as much as $1.3 billion in what would be the largest initial public offering in Moscow since 2013.

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The holding, which operates more than 14,000 convenience stores that sell alcohol, cigarettes and food under the Krasnoe & Beloe and Bristol brands, said on Wednesday that the price range has been set at between $6 and $6.50 per global depositary receipt. That would value the company at as much as $13 billion.

“We are proud of our business model and look forward to presenting it to international and Russian investors,” Mercury Retail’s Chairman Igor Kesaev said in the statement. “We believe they will appreciate the unique combination of our robust growth and profitability, the enormous market opportunity, and Mercury Retail’s development potential and attractive dividend policy.”

The book-building process begins Wednesday and is expected to be completed on or around Nov. 9. Russia has federal holidays Thursday and Friday.

Even at the low end of the price range, a successful placement would be the largest initial public offering held exclusively on the Moscow Exchange since Alrosa’s $1.3 billion share sale in 2013 and would make Mercury Retail the largest Russian food retailer by market capitalization, ahead of Magnit PJSC and X5 Retail Group NV.

Russian companies have raised more than $3 billion in initial public offerings on various exchanges in 2021, the most since 2011, according to data compiled by Bloomberg. Mercury Retail’s owners were earlier seeking a valuation of as much as $20 billion, according to a person familiar with the situation.

Bank of America Corp., JPMorgan Chase & Co., Sberbank CIB and VTB Capital are acting as joint global coordinators and joint bookrunners, and Gazprombank JSC and Renaissance Capital are acting as joint bookrunners.

Mercury Retail’s like-for-like sales in the third quarter increased by 14% compared to a year earlier. The company accounts for more than half of revenue among Russian alcohol retailers, according to Infoline.

Mercury aims to pay quarterly dividends with a target pay-out ratio of at least 50% of net income, it said earlier.

(Updates with details starting in the sixth paragraph)

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