Russian internet major Yandex has called off the
Yandex didn't explained the reason for the decision and only said the negotiations on acquiring and merging with banking
As reported by bne IntelliNews, in September Yandex in a bombshell announcement said it intends to acquire TCS for
The decision follows reports carried by The Bell that the owner of
That deal appealed less to analysts as
Tinkov has also reportedly been talking directly with
The Bell reported that Tinkov has been talking to dozens of potential investors over the last year and half.
Tinkov was diagnosed with leukaemia it was announced in March and has been stepping back from the day to day operations of many of his companies.
BCS Global Markets commented on
Still, the analysts at BCS GM note that "the synergies from the deal were not a given, as well as the deal itself," so the development is seen neutral for Yandex and TCS (Hold recommendation for both names).
As far as TCS is concerned, while BCS GM was "inspired by possible deal", the analysts acknowledge strong TCS standalone potential of building up the business further. The banking group is expected to deliver strong 3Q20 results, while unconfirmed reports suggested that TCS is looking for another buyer apart from Yandex.
Analysts at
“While we believed that this potential deal might have implied some optionality value for Yandex, we never built any valuation impact into our model, given the uncertainties and risks. Therefore, we take the announcement as neutral,: Vladimir Bespalov, an equities analyst with VTBC said in a note emailed to clients. “We remain positive on Yandex, with our 12month Target Price of
potential decline in Yandex's stock on the back of the potential deal being terminated as an opportunity.”
Yandex will continue to look for fintech opportunities as Russia’s new economy has reached a critical mass and the leading companies are currently in the process of expanding and building up entire ecosystems through a string of acquisitions and investments. Yandex is battling it out with the other industry leaders
“In our view, Yandex will continue to look into the development of Fintech, with potential options including other M&A deals, hiring Fintech professionals to develop expertise internally, and entering into partnerships with existing market players. Yandex might also seek to deploy the capital, which was initially earmarked for the deal with
Notably, as covered by bne IntelliNews, Yandex is venturing into the financial services terrain, stepping up the competition with the Sber ecosystem of its former ally state-controlled bank
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