BC looks to halve stake in Turkish supermarket

The partial sale of Migros would generate a 1.1.x return for the firm’s €5.5bn Fund VIII

BC Partners, a London-based private equity group, is in talks with Turkey’s Anadolu Group to offload half of its stake in Turkish supermarket chain Migros.

According to a notification on the Borsa Instanbul stock exchange, Anadolu is seeking to buy a 40.25 percent stake in Migros, and has offered TL 26 ($11.44; €9.05) per share, a 36 percent premium to the closing price on 1 October.

A source with knowledge of the potential sale told Private Equity International that this share price, coupled with a 2010 dividend of around €120 million, would leave BC Partners with a 1.1x return on its original investment, while retaining a 40.25 percent share in the company.

BC Partners declined to comment on the potential sale.

BC Partners initially acquired a 50.8 percent stake in Migros with capital from its €5.5 billion eighth fund in February 2008 in a $3.25 billion LBO, reported at the time to be the largest in Turkey’s history. The firm then acquired a further 47 percent of Migros shares.

In 2011 BC Partners sold Turkish discount supermarket Sok, of which Migros is a parent company, to Turkish food company the Ulker Group for $380 million, PEI reported at the time. Earlier that year BC reportedly placed 17 percent of its stake in Migros, around 31 million shares, on the Istanbul Stock Exchange for TL 25 ($15.86; €10.97 at the time).

At PEI’s Turkey Forum this week, both GPs and LPs told delegates that despite macro-economic challenges in Turkey – including domestic political upheaval, political unrest in bordering countries and currency volatility – there are still opportunities to make good returns on investments in the country.

“Last year the economy grew less than three percent, but our portfolio grew more than 30 percent, in dollar terms,” Kerem Onursal, a director and investment committee member at Turkven Private Equity, said. “We don’t look at how the economy is doing; we just try to grow our portfolio. We have invested over $1 billion in three deals including co-investments over the last twelve months. So despite all the difficulties, we continued to invest.”