💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

EBRD steps in to solve crisis at Russian supermarket

Published 08/24/2010, 11:34 AM
Updated 08/24/2010, 11:40 AM

* 11 percent shareholder calls all Lenta investors to meeting

* Wants headhunters to search for a new, independent CEO

* Wal-Mart, Carrefour potential buyers of Lenta

MOSCOW, Aug 24 (Reuters) - The European Bank for Reconstruction and Development (EBRD) is hoping to resolve the bitter shareholder dispute at troubled Russian supermarket chain Lenta by leading the hunt for an independent chief executive.

The bank, an 11 percent shareholder in the St Petersburg retailer, told Reuters it was seeking to convene a meeting for all warring factions to agree the process of recruiting a suitable candidate.

"Whatever the rights and wrongs we have to come to some agreement -- even if it is just the process -- otherwise the business will suffer," an EBRD spokesman in Moscow said on Tuesday.

Lenta, which has 37 hypermarkets and around $1.8 billion in turnover, has long been tipped as a bid target for U.S. giant Wal-Mart.

Sources in May said Wal-Mart, the world's biggest retailer, was in preliminary talks to buy the firm, but its descent into boardroom conflict makes a successful deal now look distant.

The conflict revolves around the sacking of former chief executive Jan Dunning by 41 percent shareholder and U.S. businessman August Meyer earlier this month.

Dunning was replaced by Meyer-approved candidate Sergei Yushenko, but his departure has not been recognised by fellow shareholders VTB and private equity group TPG.

The EBRD spokesman said the bank, which paid $125 million for its Lenta stake three years ago and supports the VTB-TPG camp, had gained approval from all shareholders other than Meyer for a clear the air meeting.

He added that the most logical way forward would be to appoint headhunters to pick a candidate.

The various shareholders had also disagreed on strategy, with Dunning favouring organic sales growth and Meyer demanding more store openings.

A spokesman for Meyer-controlled Lenta declined to comment. (Reporting by John Bowker; Editing by Jon Loades-Carter)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.