VTB’s First Deputy CEO Yuri Soloviev said the purchase of Magnit was “purely an investment decision.” Speaking to reporters at an investment conference in Sochi, Soloviev pointed to his bank’s 2012 purchase of 47 percent of fast-food chain Burger King’s Russian franchise operation as an example of its experience in the retail and consumer sector.
“When we bought a stake in the Burger King franchise,” he said, “did you worry about a state takeover of sandwiches?”
Chief Financial Officer Khachatur Pombukhchan has been appointed Magnit’s new CEO. Though Pombukhchan told investors last month that the company wouldn’t pay a dividend this year, Magnit on Friday said that a dividend is now planned for the second half. Magnit also said it is considering a share buyback, part of which would be used for a management incentive plan.
After Magnit’s sharp drop on Friday, Vadim Bit-Avragim, a money manager at Kapital Asset Management LLC in Moscow, suggested investors should brace for further declines. He said Galitskiy’s business strategy of rapid growth didn’t suit the current market in Russia, spurring him to look for an exit.
“I’m guessing he’s been mulling a sale for a while now,” Bit-Avragim said. “And he just couldn’t find a good foreign buyer.”
This article was provided by Bloomberg News.