Wal-Mart on Shortlist to Buy Russian Hypermarts

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Wal-Mart on Shortlist to Buy Russian Hypermarts

Wal-Mart is reportedly on the shortlist to buy Russian retail company Lenta, a privately held St. Petersburg, Russia-based chain of hypermarts. Also on the list are the world's second-largest retailer, French company Carrefour, Finnish retailing giant Kesko, and Croatia's Agrokor Group. Of the four contenders, only Kesko has an existing operation in Russia.

Mike Duke, Wal-Mart's head of international operations, said in June that the company was exploring opportunities in Russia. While neither Wal-Mart nor Carrefour have retail operations in Russia, both have representative offices there.

The companies vying for control have one month to inspect Lenta's books and make final offers. According to the St. Petersburg Times, the owners want to sell an 89 percent stake in the company that includes all shareholders' shares except for the 11 percent held by the European Bank for Reconstruction and Development (EBRD). A spokesman for EBRD was quoted as saying it would decide whether to sell its stake once the buyer and price are determined.

Lenta has 31 hypermarts, with 14 located in St. Petersburg and the rest in other major Russian cities. The company's revenues after value-added taxes were US $1.5 billion in 2007. Russia's leading business daily, Vedomosti, said contenders on the shortlist valued the Lenta at around US $2 billion, including US $500 million in debt.