French retailer Carrefour has provisionally valued Russian takeover target Sedmoi Kontinent at $1.25 billion, including its real estate holdings, two banking sources close to talks said Friday.
Carrefour made the Russian retailer a nonbinding offer in late February, the banking sources said.
The valuation includes 100 percent of Sedmoi Kontinent, 100 percent of the affiliated MCapital, which controls most of the company's real estate, and $450 million of debt, the sources said. The audit will continue for another two to three weeks, they said.
Carrefour was not immediately available for comment.
If the deal goes ahead, Carrefour would become the first foreign company to enter the Russian retail market since the credit crunch hit local firms. Russian retailers face a difficult year as the country battles against recession, but the downturn may also offer global majors an easier entry into the sector, which has more potential than many mature markets and where distressed assets prices are set to plunge.
Sedmoi Kontinent, which has 140 stores, saw its sales rise 23 percent to $1.4 billion last year. Deutsche Bank currently holds a controlling stake of 74.81 percent in Sedmoi Kontinent as collateral on a $560 million loan to majority owner Alexander Zanadvorov. Zanadvorov has been trying to refinance the credit or attract an investor since a margin call on the loan late last year, the sources said.
Carrefour made the Russian retailer a nonbinding offer in late February, the banking sources said.
The valuation includes 100 percent of Sedmoi Kontinent, 100 percent of the affiliated MCapital, which controls most of the company's real estate, and $450 million of debt, the sources said. The audit will continue for another two to three weeks, they said.
Carrefour was not immediately available for comment.
If the deal goes ahead, Carrefour would become the first foreign company to enter the Russian retail market since the credit crunch hit local firms. Russian retailers face a difficult year as the country battles against recession, but the downturn may also offer global majors an easier entry into the sector, which has more potential than many mature markets and where distressed assets prices are set to plunge.
Sedmoi Kontinent, which has 140 stores, saw its sales rise 23 percent to $1.4 billion last year. Deutsche Bank currently holds a controlling stake of 74.81 percent in Sedmoi Kontinent as collateral on a $560 million loan to majority owner Alexander Zanadvorov. Zanadvorov has been trying to refinance the credit or attract an investor since a margin call on the loan late last year, the sources said.