Turkey’s Sok seeks to calm investors

Turkish grocer Sok Marketler has been calling investors spooked by its deal to buy shares at a premium from its controlling shareholder, just weeks after issuing them to shore up its listing, a person familiar with the deal said.

Sok shares have fallen by some 9 percent since it disclosed the buyback from Yildiz Holding on Friday and were down 1.4 percent at 8.76 lira at 1534 GMT on Tuesday.

One international investor, who participated in $531 million initial public offering last month and has shares in Sok, confirmed it was in contact with the discount grocer.

We are aware of the situation and have been engaging with the company, the investor said, on condition of anonymity.

Sok was forced to slash its IPO price and get unlisted shareholder Yildiz Holding to buy a direct stake via a private placement in order to complete the listing, amid a downturn in demand for new Turkish listings. Sok and Yildiz did not respond to questions from Reuters.

Yildiz, which owns food brands including Godiva chocolate and McVities biscuits, is struggling with foreign-currency debt as the Turkish lira weakens and last month signed a deal with its banks to refinance $5.5 billion in debt.

Sok, which operates some 5,500 supermarkets across Turkey, said late on Friday it had bought back 33.4 million shares — or 5.46 percent of its outstanding stock - from Yildiz for 10.5 lira a share, to utilise commercial opportunity and make investment.

The price paid represented a 10 percent premium to Soks market value as of Fridays closing share price and essentially reversed its earlier $77 million capital increase.

Sok said on Tuesday the deal was subject to the same lock-up that followed its IPO and it would therefore be reimbursed by Yildiz if the market price at the end of the period was less than what it paid.