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. Last Updated: 07/27/2016

Retailer X5 Backs $1Bln Share Issue

Food retailer X5 said Friday that its board had approved a $1 billion secondary share offering to finance acquisitions and organic growth.

The issue is at the low end of a $1 billion to $2 billion range suggested earlier by CEO Lev Khasis. Analysts had expressed concern that raising too much fresh equity capital might be earnings-dilutive.

"The secondary offering of our shares is one of the instruments we are planning to use during this year to raise additional capital to finance the potential acquisition of the Karusel hypermarket chain," Khasis said in a statement.

The option to buy Karusel becomes effective on Jan. 1, although one of the company's owners has said Wal-Mart Stores was a potential buyer.

Company spokesman Gennady Frolov said X5 would announce details of the share offering in June and hoped to complete the transaction in October or November.

London-listed X5 would also consider floating shares in Moscow, but only if legislation allowing the creation of Russian depositary receipts, a type of proxy share, is in force by then.