Reuters: Mergers News: Yandex, Mail.Ru may face share restrictions -paper

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Yandex, Mail.Ru may face share restrictions -paper May 31st 2012, 07:57 MOSCOW | Thu May 31, 2012 3:57am EDT MOSCOW May 31 (Reuters) - Russian internet firms Yandex , Mail.Ru and Vkontakte may be included in a list of strategic assets, meaning they must obtain official permission before selling stakes to foreign investors, the Vedomosti daily reported on Thursday. The property committee of the State Duma, the lower house of parliament, has proposed expanding the list of strategic assets to internet companies with over 20 million monthly visitors, the newspaper reported. "This means the purchase of more than a 10 percent stake in such companies by a foreign investor would need state approval, as well as the placement of the shares on an international stock exchange," wrote Renaissance Capital analyst David Ferguson in a research note. "The regulations would also affect transactions made by Russian investors completed through offshore vehicles. If passed, the legislation would be slightly negative for Yandex and Mail.Ru, in our view." Yandex, known as the 'Russian Google', raised $1.4 billion when it floated on the U.S. Nasdaq exchange in May 2011. Mail.Ru is a popular portal, while social network Vkontakte has just dropped plans to float following the flop of Facebook's recent initial public offering. Analysts at Bank of America Merill Lynch said in a research note they expects the initiative "to add to negative sentiments" towards the Russian market, "as another indication of growing government influence in the economy". Renaissance's Ferguson said that while no specific deals are expected in the short term, Yandex shareholders such as private equity funds Baring Vostok and Tiger Global - which he says have 19 percent and 17 percent stakes in Yandex, respectively - would find any future exit more complicated as a result. Vedomosti reported that Yandex may already be considered a strategic asset because it uses cryptography in its Yandex.Money service, a payments service similar to PayPal. State-controlled lender Sberbank already owns a so-called golden share in Yandex. Link this Share this Digg this Email Reprints

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