South African media and e-commerce Naspers said it was in talks to increase its stake in Avito, confirming a Reuters report that the group was close to taking control of Russia’s largest classified advertising platform.
“We can confirm that we are currently engaged in a process to potentially increase our stake in Avito,” a Naspers spokeswoman said.
Reuters had reported that Naspers was nearing a deal to buy out the 32.1 percent held by minority shareholders in a deal that could value Avito at about $4 billion, implying Naspers could spend roughly $1.3 billion.
Naspers had $8.7 billion in cash as of the end of September.
The South African company has transformed itself from a newspaper publisher into an $96 billion media empire by pushing into websites and e-commerce, holding stakes in Russian internet group Mail.Ru and Chinese social network and online entertainment firm Tencent.
Vostok New Ventures, one of Avito’s four minority investors with a 13.2 percent stake, said separately it was in talks to sell its stake in Avito to Naspers Russia Classifieds for $540 million.
The potential deal, which it said was in the final stages and expected to be announced within the next few hours, implies an equity valuation of about $4 billion for Avito, it said.
Avito, whose other minority shareholders include its Swedish founders and another fund called Baring Vostok, was not immediately available to comment.
The company was launched by entrepreneurs Jonas Nordlander and Filip Engelbert in 2007 as Russia’s answer to Craigslist and today owns and operates the country’s largest online classifieds website Avito.ru.
Online marketplaces in Russia have grown rapidly in the last few years, offering anything from food delivery and cleaning to private house construction services.
Naspers invested in Avito in 2013 by buying a 17.4 percent stake, merging in its local classified businesses and injecting $50 million in cash. The transaction valued Avito at more than $570 million.
The Cape Town-based company consequently became Avito’s majority shareholder in 2015, when it bumped up its holding to 67.9 percent, putting a worth of $2.4 billion on the target.
The company’s marketplace today covers a range of classified categories including autos and real estate and attracts over 32 million unique visitors a month, according to its website.
Source: Reuters.com