Private investors complained about Yandex NV share exchange conditions

The association letters indicate two risks:

1. Short deadlines for exchange: collection of applications takes place from May 14 at 15:00 Moscow time, June 21, 2024. At the same time, the consortium is ready to exchange no more than 50 million shares . “More than 1 million Russians own Yandex NV shares, if at least 30% of them fail to take advantage of the offer, 300 thousand will lose their investments,” ARI believes.
2. Voluntary exchange: for Yandex NV shares acquired in the Russian circuit, there is practically no alternative to exchange, and without it “they become practically useless.” The organization admitted that investors may miss the offer due to lack of knowledge, level of activity or complexity of the exchange procedure.

ARI proposes giving greater publicity to the procedure and making it “as simple and transparent as possible”; For example, the Bank of Russia could send recommendation letters to brokers asking them to inform clients about the offering procedure and risks. The second proposal is to hold another round of exchange and make it mandatory, while investors should have the right to refuse.

According to the publication, the closed-end investment fund Consortium.First, in particular, responded that the deadline for submitting exchange offers within the framework of the proposal is almost six weeks, which “corresponds to market practice.” The consortium notified Yandex NV shareholders through the website, the websites of the Moscow Stock Exchange and the St. Petersburg Stock Exchange and sent a bulletin through NSD.

The exchange procedure “may be entirely voluntary for investors, subject to applicable legislation.” Yandex NV shareholders must independently evaluate the advantages and disadvantages of the procedure and make a decision.

• In February 2024, after lengthy negotiations and consideration of various restructuring scenarios, it became known that the Dutch Yandex NV was selling the Yandex business for 475 billion rubles to a consortium of private investors.
• In mid-May, the parties completed the first stage of the transaction. MKPAO “Yandex” became the parent company of the entire group, its main owner is now the closed mutual fund “Consortium.First”.
• The second stage of the transaction involves the sale of the remaining stake of approximately 28% to Yandex NV. These processes are expected to conclude in July of this year. Under the terms of the agreement, by July 31, Yandex NV must change its name and stop using the Yandex brands.