OAO Open Investments, a Russian real estate company owned by billionaires Vladimir Potanin and Mikhail Prokhorov, plans to sell new shares at a discount of at least 26% to the stock's current market price.
Open Investments will offer 1.8 million shares at a price that won't exceed the $180.70 it got in a September share sale, according to a statement on its Web site. The shares closed today at $243 on the Russian Trading System in Moscow. The September sale raised $881 million. „They are offering shares at a discount because this way they may have more certainty that the offering will be subscribed,” said Guenter Faschang, who manages $1 billion in east European stocks for Vontobel Asset Management in Vienna. The company's shares have more than doubled in the past year, as Russia's eight straight years of economic growth drive demand for office space and modern housing. Average returns on commercial projects range from 30% to 40%, according to Renaissance Capital.
Expectations of further growth already are reflected in the stock's price, said Faschang, who said he probably won't buy the new shares. „Even at a discount the shares are now expensive,” Faschang said. He said he sold his shares after the stock's recent gains. Denis Davidko, Open Investments CEO, and Natalia Goncharova, the head of investor relations, didn't return calls seeking comment. Deutsche Bank AG analyst Alexei Krivoshapko in Moscow recommends investors buy the new shares. He has a target price of $285 a share on the stock. Interros Co., Potanin and Prokhorov's holding company, controls 61.5% of Open Investments. (Bloomberg)