Russian investment company Marathon Group on May 24 said it had acquired an 11.82% stake in Russian retailer PJSC Magnit from JSC VTB Bank for 62.5 billion Russian rubles, or about $1 billion.
According to a statement, Marathon Group, which invests primarily in pharmaceuticals, infrastructure and agricultural assets, would use its own funds and debt to fund the all-cash deal, which has been structured as a repurpose transaction.
"We see Magnit as currently an undervalued asset and believe its management team and shareholders, with certain efforts, are capable of recovering its fair market value and regaining its leadership among Russian retailers," Marathon Group President Alexander Vinokurov was quoted as saying.
Magnit operates 16,625 stores in 2,764 cities and towns across the Russian Federation, according to the statement.
VTB Bank acquired 29.1% of Magnit on Feb. 16 after Magnit founder Sergey Galitskiy agreed to sell his shares to the Russian bank for about 138 billion rubles in cash.
Marathon Group indicated its interest in the retail sector is not limited to the acquisition of the Magnit stake. It said it had established a subholding, Marathon Retail, to pursue other projects and increase its exposure to the retail market.
As of May 23, US$1 was equivalent to 61.61 Russian rubles.
