MOSCOW (Reuters) - Russian bank TCS Group Holding (L:TCSq) (MM:TCSGDR) is in talks to sell its online bank Tinkoff to Russian internet giant Yandex (O:YNDX) for $5.48 billion (£4.30 billion), the two companies said on Tuesday.
The idea was first publicly floated last year when Oleg Tinkov, founder of Russia's TCS group, suggested https://uk.reuters.com/article/idUKL8N23E2JS to Yandex's chief executive that they combine his bank with Yandex, known as Russia’s answer to Google (NASDAQ:GOOGL).
"The parties have come to an agreement in principle on a transaction that would consist of cash and share consideration worth approximately $5.48 billion or $27.64 per Tinkoff share ...," Yandex said.
The price of the possible deal represents an 8% premium to Tinkoff's GDR price as of Sept. 21. One half of the deal is expected to be paid in cash and another half with Yandex shares, a banking source told Reuters.
Tinkoff is the world's largest bank that is fully online, with more than 10 million customers across Russia.
Its founder, Tinkov has been battling acute leukaemia and had a bone marrow transplant in July. He stepped down as board chairman of the bank to focus on his health and transferred his TCS shares to a Tinkov family trust in the spring.
The possible deal was announced a few months after Yandex said it was terminating its partnership with Sberbank (MM:SBER), which opened the door for the company to compete with the country's largest bank.
On the Moscow Exchange, TCS Group GDRs rose 6.4% on the day after the deal announcement, while shares in Yandex were up 4% on the day, outperforming the broader MOEX index (IMOEX) that ended the day 0.7% higher.
The transaction would be subject to the approval of Yandex's shareholders, Yandex said.