TCS Group, the parent company of Tinkoff, is in talks to sell the bank to internet group Yandex for $5.48 billion in a deal seen as largely positive for both companies.
Oleg Tinkov, the founder of TCS Group who has been battling acute leukaemia and had a bone marrow transplant in July, said that nothing would change for Tinkoff clients who would only benefit from the deal.
"This is not a sale, but rather a merger," Tinkov posted on his Instagram account.
Analysts agree that synergies are on the table should Tinkoff become part of Yandex's stable of technological services, including data and product offering.
The rationale for Tinkoff Bank is to build into Yandex's digital ecosystem with access to its more than 60 million unique users - potential Tinkoff Bank clients, said Alfa Bank in a note.
Tinkoff is currently the world's largest online-only bank with more than 10 million customers across Russia.
"We think the deal is positive for TCS business although minority shareholders should fight for a higher price," analysts at Renaissance Capital said, adding that TCS' capitalisation now stands at around a quarter of Yandex's.
The proposed price for the deal, a cash and share consideration worth $27.64 per Tinkoff share, represents an 8% premium to Tinkoff's GDR price as of Sept. 21.
The deal announcement pushed Yandex shares as much as 15% higher on Wednesday but caused a sell-off in TCS GDR's in Moscow. In London, TCS GDRs were up 5.8% at $27.50 per piece.
The proposed deal nonetheless brings challenges, exposing Yandex to the retail lending sector and requiring a boost to the tech group's management, Renaissance Capital said.
"Credit risks of the banking business will be added to Yandex's general business risk profile," BCS Brokerage said.
The deal is also subject to shareholder approval.
"The scenario in which a significant part of TCS's minority shareholders would not tender their shares and keep TCS a listed company is likely," said VTB Capital analysts.
By Alexander Marrow and Andrey Ostroukh