Mail.ru jumps in early dealings

Date: Friday 05 Nov 2010

Earlier today, GDRs in Russian internet group Mail.ru hit a 30% plus premium in conditional dealings.

Mail.ru priced its IPO at $27.70, right at the top end of its indicated price range and a price that values the firm at $5.7bn. The price jumped to $37 at one point but it has fallen back since then.

The bookbuilding process closed one day early due to heavy demand from US and UK technology funds.

Conditional trading in the GDRs started today, with full trading scheduled for 11 November.

The gross proceeds from the primary portion of the offering are expected to be approximately $84m. Existing shareholders will generate $826m from the sale of GDRs. The free float is 17%.

Mail.ru will use the proceeds from the sale to help pay for an additional 7.5% equity stake in vKontakte, Russia's largest social networking site measured by daily unique users, for $112.5m to take its stake to 32.49%.

Mail.ru is the largest internet company in Russian-speaking markets and the group's sites reach approximately 70% of Russian Internet users on a monthly basis. The group came together in 2005 but its origins date back to 1998.

Mail.ru owns two of the top three social networking sites in Russia and the two largest instant messaging networks. Mail.ru is Russia’s second largest internet portal.

Mail.ru has a 25.1% stake in Qiwi, one of Russia’s leading payment processing companies. Qiwi has 180,000 point of sale payment terminals. The company also has a 2.38% stake in Facebook.

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