The international retailer Wal-Mart has reportedly undertaken a second due diligence in regards to the potential acquisition of the Russian Kopeyka retailer and resumed talks with owner Nikolay Tsvetkov. Kopeyka will likely use this opportunity to increase the sales price. Most probably, for this very reason, the company abandoned the idea of an IPO this year.
In a conversation with Retail Update Russia, Retail Solutions General Director Art Vartanian said the postponement of Kopeyka’s IPO was most probably connected with the reported second due diligence. He added that Kopeyka can conduct an IPO at any time in the future, but an offer from such a large retailer as Wal-Mart is rare. Therefore, Kopeyka may test the situation in hopes to receive a better price, although valuations are already quite high, he said.
Wal-Mart announced its interest in Kopeyka in late 2009. However, the companies failed to agree on a price this June and abandoned their talks.
Previously, Russia’s largest retailer, X5 Retail Group, came close to acquiring Kopeyka. The company appealed to the Russian Federal Antimonopoly Service (FAS) to approve the deal in late July, which was estimated at $1.6-1.8m at the time. X5 was permitted to acquire a part of Kopeyka’s assets in September (i.e. Kopeyka Development, Proviant and the Develop Group, which manages Kopeyka’s real estate) and nearly reached a deal. However, Kopeyka recently announced that the company is refraining from making any sales declarations, reportedly due to Wal-Mart’s aforementioned second diligence.
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