Yandex, a Russia-based search engine formerly backed by Intel Capital, plans to raise $1bn in its Nasdaq stock exchange flotation but with a government block on any takeover of the company.
Intel had committed to a fund, Ru-Net, managed by Baring Vostok Private Equity and local bank UFG, which paid $5m for a 35% stake in Yandex in 2000. However, while the other assets in Ru-Net, such as property website Ozon, were distributed to limited partners, Yandex was retained in the ongoing vehicle, Internet Search Investments.
Baring Vostok owns nearly a fifth of Yandex’s A shares and almost a quarter of its B shares to have a 23.9% total voting power ahead of the portfolio company’s initial public offering, according to the company’s regulatory filing. Each B share has 10 votes while an A share has one vote.
United Financial Group (UFG) has a 3.4% holding, excluding shares held in other vehicles, such as Kameson.
However, in September 2009, Yandex sold for €1 ($1.5) a "priority share" to Sberbank, the largest savings bank in the Russian Federation, 60% controlled by the country’s central bank.
This priority share effectively allows Sberbank to decide if a party can own more than a quarter of Yandex’s votes.
Investment banks Morgan Stanley, Deutsche Bank (which bought UFG’s investment banking business in 2008) and Goldman Sachs are co-lead underwriters to Yandex’s flotation, which posted $134m in net income last year on nearly $440m in revenue. Earlier in the month, Yandex started a corporate venturing programme, Yandex.Factory, to invest up to hundreds of thousands US dollars in Russian and international projects at their seed or early investment stage.