MOSCOW (MRC) -- Pamplona Capital Management LLP dropped plans to buy Innovia Films Ltd., which supplies materials for banknotes, as the buyout firm’s ties to a Russian billionaire raised concerns from the Bank of England and Bank of Canada, said Bloomberg, citing people with knowledge of the matter.
Arle Capital Partners entered into exclusive talks with Pamplona, which is backed by Mikhail Fridman, about the sale of Innovia for about 500 million euros (USD641 million) in November last year, said two people, who asked not to be identified because the talks were private.
Following the agreement a number of customers at the Wigton, England-based company’s bank-note division -- including central banks in Australia and Canada -- expressed concerns over it being owned by Pamplona, the people said. Officials at the Bank of England, which agreed in March to use Innovia’s materials for its polymer notes, also raised objections, they said.
Pamplona’s cornerstone investor is Alfa Group, according to the company’s website. Fridman, 50, who has a net worth of USD13.5 billion and is the majority shareholder of Alfa Group, according to data compiled by Bloomberg Billionaires, is currently facing regulatory delays to his bid to buy German utility RWE AG’s oil and gas arm, RWE Dea AG.
While tensions between Russia and Western governments have been building since the end of last year over its military and territorial dispute with Ukraine, the banks’ concerns were raised before trade sanctions were imposed on the country in March, the people said. Neither Fridman nor the companies he controls are subject to any restrictions.
Pamplona chose to back out of the deal in the first quarter of 2014, the people said. Arle formed a consortium of investors to buy out the company’s existing backers in April, according to a statement.
Spokesmen for Arle, the Bank of Canada, Pamplona and the Reserve Bank of Australia declined to comment. A Bank of England spokeswoman said the U.K. central bank doesn’t comment on the commercial activities of third parties. Representatives for Innovia and for Mikhail Fridman didn’t respond to requests for comment.
MRC