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Yandex-Uber JV in Talks With Morgan Stanley, Goldman for IPO

Giles Turner and Ilya Khrennikov

(Bloomberg) -- Russian search engine Yandex NV’s ride-hailing unit, part-owned by Uber Technologies Inc., is in talks to hire Morgan Stanley and Goldman Sachs Group Inc. to manage its initial public offering, according to a person familiar with the matter.

MLU BV, as the unit is legally known, is preparing for a dual-listing in Russia and the U.S., the person said, who asked not to be identified as the talks are confidential. Yandex first flagged in 2017 that it intends to list its taxi arm. Uber listed its group business in May, but has since suffered a 30% share price slide.

Yandex.Taxi has discussed a wide range of potential valuations for the business ranging from $5 billion to $8 billion, depending on final make-up of the listed business as well as investor demand, the person said. Analysts at Goldman Sachs recently valued the unit at $7.7 billion, according to estimates seen by Bloomberg News.

“An IPO is something we are considering as we have said previously, and we work with a number of banks on a variety of issues,” a Yandex.Taxi spokesman said. Morgan Stanley declined to comment, while Goldman Sachs did not respond in time for publication. Both banks worked on the IPO of Yandex’s search engine business in 2011. No final decision has been made and Yandex could opt to keep the unit.

Uber agreed to cede control in its operations in Russia and former Soviet Union to Yandex two years ago. The joint-venture, controlled by Yandex and 37% owned by Uber, was valued at $3.8 billion when formed in February 2018.

The unit, which also includes food delivery and self-driving cars, turned profitable in the second quarter of this year. It is not yet clear whether self-driving and food delivery would be included in the IPO, the person said.

Yandex has been expanding to a number of different businesses including car-sharing, e-commerce, online cinema and classifieds. However its shares have come under pressure after Russian legislators recently mulled a law limiting foreign ownership in “significant information resources.”

--With assistance from Myriam Balezou.

To contact the reporters on this story: Giles Turner in London at gturner35@bloomberg.net;Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net

To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net, Giles Turner

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