Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Open Investment to Sell Shares at a Discount

Open Investments, a real estate company owned by billionaires Vladimir Potanin and Mikhail Prokhorov, plans to sell new shares at a discount of at least 26 percent to the stock's current market price.

Open Investments will offer 1.8 million shares at a price that won't exceed the $180.70 it got in a September share sale, said a statement posted on its web site.

"They are offering shares at a discount because this way they may have more certainty that the offering will be subscribed,'' said G?nter Faschang, who manages $1 billion in East European stocks for Vontobel Asset Management in Vienna.

The company's shares have more than doubled in the past year as demand for office space and modern housing in Russia continues to rise.

Average returns on commercial projects range from 30 percent to 40 percent, according to Renaissance Capital. Expectations of further growth already are reflected in the stock's price, said Faschang, who said he probably would not buy the new shares.

"Even at a discount the shares are now expensive,'' Faschang said. He said he sold his shares after the stock's recent gains.

Deutsche Bank analyst Alexei Krivoshapko recommends investors buy the new shares. He has a target price of $285 per share on the stock.