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. Last Updated: 07/27/2016

Troika Is Considering Strategic Alliances, IPO

Shareholders of Troika Dialog have no immediate plans to sell the brokerage but are considering strategic alliances and a possible stock market listing, company president Ruben Vardanyan said.

Vardanyan was responding to a report Thursday, sourced to investment bankers, that Swiss bank Credit Suisse, in addition to J.P. Morgan Chase, was in talks to acquire an equity interest in Troika, a leading player in equity sales and trading and asset management in the country.

"Shareholders in Troika Dialog do not face the task of selling the company," Vardanyan said in a statement. "The past year was the most successful in the history of the company."

The banking sources said Credit Suisse appeared to have a better chance of closing a deal to buy a 50 percent stake in Troika, with a possible option for more.

Another source said Friday that the deal had already been approved internally at Troika.

They also said a buyer might get an interest only in Troika's brokerage and investment banking operations but not in its fund management side, which has $3 billion under management, or the private equity business.

The sources said J.P. Morgan wanted control over Troika and that a $600 million bid from state-owned Vneshtorgbank, or VTB, was rejected as too low.

A source at VTB denied that any formal offer had been made but did not rule out the acquisition of an investment banking franchise in the country.

VTB, the country's second-largest bank, is preparing for an initial public offering next year that officials say could raise $4 billion and boost its standing as an international player. But the bank lacks a serious investment banking arm to round out its profile.

Another banker linked VTB to Renaissance Capital, a leading independent player, although a source at RenCap said the bank had the strength to stand on its own. "Renaissance will stay independent for a long time," the source said.

One source told Renaissance that owners were asking for $3 billion.

The rush by foreign banks to get into the country comes amid a runaway boom in deals on both equity and debt capital markets.

Dresdner Kleinwort forecasts that initial public offerings by Russian companies will raise around $22 billion this year, up from $6.5 billion in 2005, with more to come next year.

Bankers say local players including Troika, Aton and Renaissance risk getting squeezed out by foreign entrants and may have to follow the lead set by United Financial Group, which was taken over one year ago by Deutsche Bank.

Vardanyan said Troika was analyzing its strategic options, including widening its partnership with Singapore's state investment company Temasek Holdings.

"At this moment, we are consulting with Goldman Sachs on floating Troika Dialog via an IPO, looking at the options of strategic alliances with large Russian, European, American, South African and Japanese banks," he said.