Project: The effect of takeover talks with Sberbank on Yandex business and stock
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The effect of takeover talks with Sberbank on Yandex business and stock

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Started: 06/11/2018
Last update: 06/12/2018
Date of publication: 06/12/2018

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About the project

Russia’s largest bank, state owned Sberbank, was reportedly negotiating about acquiring control in the Russian largest internet company Yandex. As a defense from a possible takeover, Yandex now considers a reorganization of its voting shares structure. We’d like to review the situation in terms of Yandex’ stock outlook.

1. The news on negotiations with Sberbank dropped Yandex shares by 30%, and they haven’t recovered fully yet. Why did the market react so negatively? Which negative/positive effects a potential takeover may have on Yandex’s business? How might it affect other Russian tech stocks (eg. Mail.Ru Group)?

2. Two weeks later, Yandex announced a major reorganization of its voting stock which is viewed as defense against a takeover (https://www.kommersant.ru/doc/3786372). The company will issue a new class of shares that would hand 60% of voting control to a fund run by its CEO. Is it an efficient way to protect the company? How would this reshuffling affect class A shareholders (market investors)?

3. Given the aforementioned circumstances, what is your medium term outlook for Yandex stock and other Russian tech stocks, taking into account both fundamental and news-driven factors?

This report will be distributed as a newsletter among the subscribers of The Bell. Attached is an example of a report fitting to the format.


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