Ahead of its flotation on the US stock exchange, Russian search giant Yandex will be offering shares at roughly twice the price of Google, relative to earnings, it has been revealed this week.
Yandex is Russia’s largest search engine, accounting for over 60 per cent of searches, while rival Google lags behind because its searches in Cyrillic are not as effective as their English service.
Bloomberg reports that the Moscow-based company, which has almost triple Google’s market share in Russia, plans to sell shares at a price equivalent to at least 23 times next year’s earnings.
The paper cited two people involved in the sale who declined to be identified until the deal is announced. Google trades at 13 times expected 2012 earnings.
Underwriters stopped taking investor orders for Yandex shares on May 20, rather than this week as planned, because of surging demand for Internet IPOs, Bloomberg reports, citing two other people with knowledge of the matter.
The initial public offering in the U.S. may raise as much as $1.26bn, making it the world’s biggest technology IPO this year behind LinkedIn.
Proceeds from the sale will be invested in technology, infrastructure and possibly acquisitions, the company said in the prospectus. Morgan Stanley (MS), Deutsche Bank AG (DBK) and Goldman Sachs Group Inc. (GS) were hired to manage the sale.
About 47 million Russians, or 33 percent of the country’s 143 million people, used the Internet in March, the biggest number in Europe after Germany, according to research firm ComScore Inc. The Internet audience has risen 13 percent in the past year, with 60 percent of teenagers and adults in cities with populations greater than 100,000 using the Internet, according to a March poll conducted by researcher TNS Russia.
Yandex was the world’s seventh-biggest search engine in 2009, behind global leaders Google and Baidu, China’s largest search engine.
The IPO is set to price next week, according to data compiled by Bloomberg.
The company had been mulling an IPO in 2008 on the Nasdaq, which would have raised between $500 million and $1 billion, but it was put on hold by the crisis.
