Investment group LetterOne (L1) acquired a stake in the Spanish retail network Dia, according to the materials of the National Commission for the Spanish Stock Market.
LetterOne Investment Holdings received 3% of the company (18.7 million shares) and another 7% (43.6 million shares) became pledged under the forward transaction. The deal took place on July 27, at the close of trading that day, 3% of Dia cost about 97.6 million euros. The cost of buying a stake and the timing of the future transaction of L1 did not disclose.
At the end of 2016, Dia operated 7,800 stores in several formats in Spain, Portugal, China, Argentina and Brazil. Also the company is engaged in distribution of consumer goods. Net revenue for the company in 2016 amounted to 8.87 billion euros. According to Reuters, Dia is the second largest retail chain in Spain. In the past few years, the retailer has invested in upgrading stores and their formats to restore sales growth at comparable points, the news agency recalls.
$ 2.3 billion from the $ 3 billion fund L1 Retail can spend on the acquisition of Europe's largest chain of healthy food stores Holland & Barrett. On the purchase of the investment company agreed at the end of June, on July 27, the L1 structure submitted a petition to the European Commission.
In the years 2000-2011. Dia was part of the French Carrefour, which preferred to separate the asset and place it on the exchange in Madrid in 2012. So far, the largest shareholder of Dia with a package of 10.5% was the investment company Baillie Gifford & Co, 6.5% - from BlackRock, about 5 % - from Black Creek Investment Management, according to the company's data for June 2017. In free circulation - 66%. It turns out that if LetterOne Investment receives another 7% in the forward transaction, it will become the second largest shareholder in the Spanish network.
L1 was established in 2013 to invest in international projects the funds received for the stake in TNK-BP sold to Rosneft. The amount of the transaction is $ 14 billion. L1 Retail, established in late 2016, plans to invest up to $ 3 billion in Europe and emerging markets. L1 Retail is interested in companies that, in its opinion, can become leaders, said on its website.
Having bought a small package of the Spanish network, L1, probably, wants to take a closer look at how a large European retailer works, argues the manager of one of the private equity funds. Probably, the partners together will develop new markets for Argentina, Brazil, China, he believes.
Dia has really big plans for South America. By 2020, it is going to open more than 1500 stores in Brazil, more than 1100 in Argentina, said in a presentation for investors Dia on July 7, 2017. In these countries, the population is growing, and young people are 50% of the market, the company says. .
Probably, for L1 this is a portfolio investment, analyst of BCS Global Markets Marat Ibragimov believes: after gaining a stake in the Spanish network, L1 can count on profit from the increase in value without taking part in management.
Representative Dia declined to comment, L1 - did not answer the questions.