Sberbank Offering Falls Short, Investors Cite “Arrogance”

From the Financial Times (emphasis ours):

Sberbank issue to fall short of Russian record By Catherine Belton in Moscow and Joanna Chung in London Sberbank, the largest savings bank in Russia, is set to raise $8.8bn in a share offering that has fallen short of hopes that it could be Russia’s biggest. Alexei Kudrin, Russia’s finance minister, yesterday said Sberbank’s supervisory board had set a price of $3,398 per share, a small discount to the current market price. But the volume of shares to be issued will fall short of the maximum 3.5m shares on offer. One person familiar with the situation said a maximum 2.6m shares would be placed. The deal has become the second largest in Russian corporate history, after the $10.6bn Rosneft raised last year. The offering has been dogged by complaints about bureaucratic hurdles and lack of transparency and some observers say that led to lower demand. However, some investors said the pricing of the share sale at just below the market rate meant it was a success. “This is the first international placement where they didn’t even bother to translate the prospectus into English,” said Eric Kraus, a fund manager at the Nikitsky Fund. “It looks like they’re starting to get arrogant.” Big western investors had taken part anyway, Mr Kraus said, because “if you want a large piece of Russia this is the only way to get it”. With more than 60 per cent of the nation’s retail deposits and 20,000 branches, Sberbank is seen as one of the best ways to invest in Russia’s consumer sector. Two people familiar with the situation said international institutions had placed orders for about $3bn worth of shares, while Russia’s Central Bank, which controls Sberbank via its 63.7 per cent stake, would buy 34 per cent of the issue, or $3bn worth of shares.