OREANDA-NEWS. June 04, 2010. Synergy plans to sell 50% of its non-core food business via an IPO of a subsidiary for USD100m (100% of the non-core assets valued at USD200m), reported the press-centre of OTKRITIE Financial Corporation.

View: Food assets contributed only 16-17% to the company's gross profit in 2009. We expect the market to assign USD 100m value to these assets, which is half what the company is expecting to get. The company may use the proceeds from the placement to finance agriculture assets, in particular, developing farm land of around 50k hectares. The news is positive in our view. If Synergy lists its non-core subsidiary it will give the company more transparency and monetize the value of the non-core assets.

Valuation and Action: The stock trades on a 2010 EV/EBITDA of 7.1x, which is a 60% discount to EM peers. We reiterate our BUY rating for the stock.