Rogachyov, Partners to Sell X5 Stake

MTCustomers entering a Pyatyorochka store, which was merged with the Perekryostok chain to create X5 in 2006.
Billionaire Andrei Rogachyov said Wednesday that he had hired Morgan Stanley to find a buyer for the 21 percent stake in retailer X5 Retail Group that he owns jointly with three partners.

Rogachyov, whose personal stake in X5 is around 12 percent, wants to sell the holding in the country's largest food retailer to focus on real estate investment, he said. On Wednesday X5 shares fell the most in more than three months.

"There is no particular need for money," said Rogachyov, the co-founder of food retailer Pyatyorochka, which merged with the Perekryostok supermarket chain to form X5 in 2006. "If a good price is offered, then we would sell."

X5 slid $1.87, or 5.6 percent, to $31.75 in London, where the stock is listed. That was the steepest percentage drop since Nov. 27. The 21 percent holding is worth about $1.44 billion, based on X5's current market value.

The buyer "could be a large portfolio investor or several institutional funds, like Middle Eastern funds or sovereign funds," said Brady Martin, an analyst at Alfa Bank. "It's less attractive for a strategic investor because it's still a minority stake."

Rogachyov said he had no "preferences" about the type of investor that will acquire the stake or the method of sale, adding that "everything depends on the price." A sale on the market is unlikely as the stock would probably fall after an offering of that size, Martin said.

Other holders of the 21 percent stake include Pyatyorochka co-founders Alexander Girda, Tatyana Franus and Igor Vidyayev, Rogachyov said.

The billionaire said he would spend funds from the sale on his Terra On company, which invests in early-stage development projects.

Rogachyov has spent $1 billion on the company and is raising additional funds from other investors.