Linklaters clinches top role as Moscow Exchange gears up for IPO

Linklaters has landed the lead role advising the Moscow Exchange, Russia’s primary stock index, on its planned stock market flotation, which is set to value the company at up to $4.6bn (£2.9bn).

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The Moscow Exchange, which is a result of the $4.5bn merger between the Moscow Interbank Currency Exchange (MICEX) and Russian Trading System (RTS) in 2011, announced its plans to float last month in a bid to encourage more Russian companies to list solely in Moscow rather than opting to float on the London Stock Exchange, as many have done over the past few years (2 April 2012).

Linklaters is advising the Moscow Exchange on the deal, with a team led by London-based capital markets partner Jason Manketo, alongside capital markets senior partner Dmitry Dobatkin and partner Sasha Karachourina in Moscow. Capital markets counsel Cheri di Luca also assisted the team from the firm’s London office.

White & Case is advising the underwriters, which include Credit Suisse, JPMorgan, Sberbank and VTB Capital acting as joint global co-ordinators and joint bookrunners. Deutsche Bank, Goldman Sachs, Morgan Stanley, Renaissance Capital and UBS are acting as bookrunners.

The White & Case team includes Moscow-based partner Darina Lozovsky and counsel Dmitry Lapshin and London-based corporate partner Allan Taylor and capital markets partners Josh Kiernan and Doron Loewinger.

The exchange is set to float on 15 February, with the offering expected to be priced at around $500m (£319m).

An estimated 60 percent of this will go towards existing shareholders that are selling their stakes as part of the deal and around 40 percent is set to go directly to the company, which is reportedly raising money to invest back into its IT infrastructure and clearing business. As part of the deal, the exchange is also planning to increase the size of its dividends to attract future potential shareholders.

It is understood that the Russian Central Bank and Sberbank, which together own a 35 per cent stake in the exchange, do not plan to sell their stakes as part of the offering. Other shareholders include the European Bank of Reconstruction and Development (EBRD), state-backed Russian Direct Investment Fund (RDID), Unicredit and Gazprombank.

It is unclear whether any other law firms have been drafted in to advise the exchange’s large number of shareholders.

Background to this deal:

Linklaters has regularly been seen acting for the banks on recent IPOs by Russian companies (2 April 2012). The firm recently acted for the underwriters as Sberbank launched its long-awaiting secondary public offering, which saw the bank raise $5.4bn in London and Moscow. Both Manketo and Dobatkin led the Linklaters team on this deal as well, while Cleary Gottlieb Steen & Hamilton London partners David Gottlieb, Simon Ovenden and Moscow-based corporate finance partner Murat Akuyev advised Sberbank on the flotation (17 September 2012).

However, Linklaters has a historical relationship with the Moscow Exchange, having acted for MICEX in 2011 when it acquired RTS and subsequently merged with the stock index to create the newly-branded Moscow Exchange. Moscow corporate partner Grigory Gadzhiev led the deal.

Debevoise & Plimpton acted for RTS on the merger, with a team led by Moscow-based corporate finance partner Alan Kartashkin. A spokesperson from Debevoise confirmed that the firm does not have a role on the current exchange’s flotation.

Cleary and Freshfields were the firms that scooped the leading roles on the most recent high-profile IPO by a Russian company last September when MegaFon went public on the London Stock Exchange (12 September 2012).

It was later revealed that White & Case was also involved in the deal, acting for TeliaSonera, one of MegaFon’s primary shareholders (10 October 2012).

White & Case has also acted on a number of recent Russian IPOs, including advising RusPetro on its £169m IPO in January 2012. Clifford Chance was retained to advise the banks on this occasion (2 April 2012).