MOSCOW, Feb 3 (Reuters) - Russian hypermarket chain Lenta, part-owned by U.S. private equity firm TPG,, said on Monday it would float in London, tapping demand from investors for consumer-focused stocks buoyed by a rising middle class.
The move could produce a rare success story for a U.S. buyout firm in Russia, giving TPG the opportunity to partly exit an investment it made in 2009.
Lenta said TPG, which owns a 49.8 percent stake, would be a selling shareholder alongside the European Bank for Reconstruction and Development which holds 21.5 percent and Russian bank VTB which owns 11.7 percent.
Sources familiar with the matter had said Lenta was talking to banks about a listing which could raise at least $1 billion and could command a valuation of over $5 billion.
Lenta will be competing for investor attention with German retailer Metro AG, which plans to sell up to a quarter of its Russian cash-and-carry unit in a London listing to raise funds to invest in the fast-growing business and pay down debt.
Metro's listing, planned for the first half of the year, is expected to raise at least 1 billion euros ($1.36 billion) with analysts valuing the total Russian business at 4 billion-7.5 billion euros.
On Monday, Lenta also reported full-year earnings with net profit of 7.1 billion roubles ($201.6 million), up 38 from the previous year on sales of 144.3 billion roubles, up 31 percent with a gross margin of 21.8 percent.
The London shares will trade as global depositary receipts (GDRs) and it also intends to trade shares in Moscow. There is an over-allotment option for bookrunners to buy additional GDRs representing up to 15 percent of the shares sold.
The banks advising on Lenta's IPO are JP Morgan Chase & Co , Credit Suisse, UBS, Deutsche Bank and VTB, Lenta said. TPG Capital is acting as a co-manager while Rothschild is acting as financial adviser to Lenta.