Tinkoff ends tentative USD 5.5 billion deal with Yandex causing share plunge

RUSSIA / FSU POLITICS - In Brief 16 Oct 2020 by Alex Teddy
On October 16 it was announced that the mooted merger between Russia's main tech company and a bank is off. Tinkoff bank's founder Oleg Tinkov pulled away from negotiations. Tinkoff's holding company TCS is listed in the London Stock Exchange.Tinkoff and Yandex said that they had an agreement in principle for the tech company to take over the bank. The deal was about cash and shares. Shares in both companies lost a lot of value on October 16. Tinkoff fell 6% and Yandex fell 4%.There were rumors earlier this week that the deal might fall through. Mr Tinkov spoke to several companies about buying his bank in 2020 and 2019. Tinkoff made a profit of USD 500 million in 2019. Tinkov says his bank will not be sold to anyone else now that the deal with Yandex has come to nought. The negotiations seem to have failed over the role of Mr Tinkov. Tinkov is being treated for leukemia in the UK. The US is seeking his extradition over USD 1 billion in unpaid taxes. Tinkov wanted some control over his bank after the sale. Yandex found this unacceptable. Tinkoff and Yandex were due to merge. They would have been the largest non state company in Russia. There was talk of selling Tinkoff to MTS but that idea is dead now. The idea was that Tinkov would be a major shareholder in Yandex if the deal went through but now Tinkov will not be. The Central Bank of Russia said on October 16 it would investigate both banks for insider trading.Tinkoff's websites show that the bank's volume of share transactions related to Tinkoff's global depository receipts (GDRs) jummped 1.8 million on October 12. The GDR is a financial instrument that represents shares in the group and is traded on the LSE with a...

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