By Darya Korsunskaya and Alexander Marrow
(Reuters) -Yandex's Dutch holding company is considering selling all its Russian assets at once, rather than just a controlling stake, three people close to the matter told Reuters, as the parties race to finalise a deal before the end of the year.
Often referred to as "Russia's Google (NASDAQ:GOOGL)", tech firm Yandex (NASDAQ:YNDX) was one of the few Russian companies with the potential to become a global business until Moscow started its war with Ukraine in February 2022.
Yandex dominates the taxi and online advertising sectors in Russia. Its ride-hailing service operates in eight African countries and the company has tested self-driving cars in Israel and the United States.
Under pressure to comply with Kremlin demands over content, Yandex sold its news aggregator and other online resources to state-controlled rival VK in late 2022, seeking to depoliticise its business. It then began work on a corporate restructuring.
With a Dubai board meeting scheduled in late November, the parties involved are hoping to reach an agreement in December, the people said. Any deal ultimately requires approval from shareholders and Russia's government.
Yandex declined to comment and the people could not be named because the matters are not yet public.
Dutch holding company Yandex NV's planned restructuring is aimed at recouping some shareholder funds with the sale of its main revenue-generating Russian businesses, such as its search and ride-hailing operations. It then plans to develop four other business lines internationally.
'CONTROL FOR LESS'
Yandex NV may sell 100% of a holding company set up in Russia's Kaliningrad region, said one of the people. Another said Yandex NV's complete exit was quite likely, though not decided.
A third source said this scenario would see Yandex NV make a clean break with Russia. The sources said it was possible buyers would not end up with 100% of the assets, as Yandex management could hold share options. Some Russian investors in Yandex NV would also have the opportunity to convert their stakes.
One of the people estimated the total value of the deal at 560 billion roubles ($6.18 billion), after accounting for a 50% discount that the Kremlin demands for foreign asset sales.
Another person said the transaction would be around $5 billion.
In May, sources told Reuters that Russian billionaires had put forward bids, offering around $7 billion for half of the company.
"Russia acquires control for less," the third person said.
Moscow has raised pressure on exiting foreign companies, demanding a contribution of the sale price to the Russian budget, and even seizing assets in the case of Danish brewer Carlsberg (CSE:CARLb) and French yoghurt maker Danone.
Yandex NV shareholders could easily have been left with nothing, said one of the sources.
The deal's prospects came under further strain when Yandex's co-founder Arkady Volozh criticised Russia's "barbaric" invasion of Ukraine in August. Four people subsequently told Reuters that the Kremlin's fear of a serious tech brain drain was the main factor preventing Moscow from nationalising Yandex.
($1 = 90.6340 roubles)