OREANDA-NEWS. October 18, 2010. Wal-Mart has renewed its interest in Kopeyka, a discount retail chain that has loomed as a possible acquisition target for X5. According to Vedomosti, Wal-Mart is once again conducting due diligence on Kopeyka. In September, the price mentioned for X5’s acquisition of Kopeyka’s business was about USD 1.5bn (USD 400m in debt and USD 1.1bn for equity), reported the press-centre of OTKRITIE Financial Corporation.

View: We think the news is marginally negative for X5, as it has the potential to drive up the price for acquiring Kopeyka. A higher price could discourage X5 from purchasing a retail chain that represents a good fit for X5 in terms of format.

Valuation and Action: X5 trades at a 2011E EV/EBITDA of 9.5x, which is a 20% discount to EM peers.