Interros, the Russian private equity investor, successfully reduced its stake in property company Open Investments, pricing the float at the top of the range. The company raised a total of US$68.8m in the 1.4m primary share offering, allowing Interros to cut its stake to 61.5%.
The final level was a deliberate response to recent Russian deals, in particular the New York listing in October of steel company Mechel, which traded down immediately and has struggled to regain its US$21 offer price.
Most orders came in without limits and it would have been possible to price at the top of the range, but the company heeded advice from bankers and investors and left some upside on the table. The price was US$49.75 from a range of US$42.75–$52.25. The key factor for the company was that this placed the stock at a premium to NAV.
ING was lead manager and sole bookrunner for Open Investments, with AKB Rosbank as senior co-lead and Troika Dialog as co-manager. The company has a 38.5% free float and is valued at US$178.6m.
The offer saw strong demand, with the top five orders requesting about 75% of the deal. International demand was the driver as domestic participation was limited. Feedback from Russian institutions said this was because in many cases they already had real estate exposure through dedicated funds.
More than half of the stock was placed with UK institutions, with other significant participation from Sweden, Germany and Austria. The offer was split equally between unlisted GDRs and domestically traded stock. The GDRs are unlisted as the company does not have the required three-year track record, although it can apply for listing in London when it qualifies next year. Interros will then receive an equal amount of new stock subject to admission approval from the regulator, which can take between one and three weeks.